The lecture, titled ‘Biased Securities Regulators? Evidence from China’, was introduced by Professor Ulla Liukkunen, Director of the Finnish China Law Center.
In his presentation, Prof. Xi discussed the much-debated question of whether securities regulators are sensitive to considerations that extend beyond the ‘mere merits’ of a case. While this question has received attention in the United States, little is known about the determinants of enforcement actions taken by regulators of Chinese securities markets.
Why is this important? Among other reasons, because the Chinese securities market is the second largest in the world.
During a stimulating presentation and discussion, Prof. Xi discussed his empirical research that involved manually collecting a new dataset on all so-called ‘disclosed’ securities enforcement actions, both formal and informal, taken against securities violations by Chinese securities regulators between 1998 -2016.
Prof. Xi’s research demonstrates that larger Chinese firms, those controlled by the state, those that are more politically embedded, and firms that cooperate more closely with securities regulators, are less likely to be targeted by regulatory enforcement actions. In addition, when these types of firms are targeted, they are more likely to fare better.
On the other hand, Prof. Xi’s research revealed what he considered a ‘counter-intuitive finding’: that closer personal bonds between people working in Chinese firms and securities regulators are likely to reduce the severity of enforcement actions, but are unlikely to minimize the likelihood of being targeted in the first place.
During his visit to Finland, Professor Chao also taught in the University of Helsinki Summer School Course, ‘Law and Society in China‘, coordinated and taught by the Finnish China Law Center’s postdoctoral researcher Dr. Yihong Zhang.