- Legal protections to investors,
- Stock market development,
- Political economy of legal development
This chapter seeks to provide an understanding of how legal protection for shareholders gradually emerged in China. Specifically, we trace the underlying forces driving the emergence of legal protection to shareholders to the vested interests of the central government. We show that the evolution of the legal developments is consistent with the government’s changing interests in the stock market, with the provision of shareholder protection becoming an increasingly important instrument for the government to serve its interests. To a certain extent, the legal developments in China’s stock market show that the country’s legal systems still maintain the ancient tradition whereby ‘‘[t]he state promulgated laws to make sure its interests were advanced. As this was done, the interests of private individuals or groups of such persons were often protected as indirect results’’ (Jones 2003, pp. 15–56).
© 2009 by Milken Institute
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