In Defence of China’s Public Enforcement in Equity Market

This article argues that China has been committed to public enforcement based on resource-based evidence. Yet certain path dependencies may prevent it from functioning properly. The article first gives an overview of the regulatory framework in China and the United States. Then it moves on to compare the China Securities Regulatory Commission (CSRC) and the Securities and Exchange Commission (SEC) in light of self-regulation, the public offering system and enforcement input/output. In terms of the bases of evaluation, this article takes into account of the resource-based measures (i.e. budget and staff size) and enforcement outcomes (i.e. enforcement actions brought or financial sanctions levied). Furthermore, it highlights their potentially changing roles in response to the financial crisis. China shifts from concentrated market towards dispersed market while the United States replaces unregulated capitalism with a proactive government intervention policy. The final part concludes. [Taken from the introduction