Equity politics and market institutions: The development of stock market policy and regulation in China, 1984-2000.

摘要

As China's government leads the transition away from socialist planning, how does it build the regulatory institutions that it needs to manage the new market economy. Creating effective institutions, the rules that govern economic transactions that are enforced by regulatory agencies, the courts, media and business, lies at the heart of a successful transition. This thesis explains and evaluates institutional development in China's stock market during 1984-2000. In the absence of private firms, public actors designed and controlled the development of institutions, orienting them to support their own particular industrial and fiscal priorities. These actors operated within a three-level hierarchy: the principals, the senior leadership (zhongyang); two sets of sub-principals, local (provincial-level) and ministry leaders; and agents, ju-level bureau leaders. The principals experienced two problems in establishing equity institutions that delivered their priorities, financial stability and market development. First, local leaders captured control of ju-level bureaux and used them to maximise investment and fiscal funds. Deficient regulation and regular financial crisis resulted. Second, at the central government level bureau leaders competed to defend their organisational interests. Policy stasis and gaps in regulation resulted. However, by 1996, the capital market was large enough to be used to support state-owned industry and by 1997 the instability caused by local policies had become a serious threat to the financial system. With their incentives thus altered, the senior leadership organised radical institutional change despite opposition at both levels. The result was the creation of a securities regulator with unrivalled administrative authority over the sector, well able to orient market development towards the zhongyang's priorities. The thesis suggests that the central leadership can manage economic transition through the use of a portfolio of institutional techniques. These include restructuring sector-specific nomenklatura arrangements, recentralising key powers, creating oversight and reporting mechanisms, strengthening Party structures, and clarifying responsibilities within the Centre.