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- W3121266935 abstract "There is a large body of law and finance literature suggesting that strong legal protection for investors is the key to a nation’s healthy stock market development and economic growth. Despite remarkable progress in setting up its securities market, China has often been criticized for its underdeveloped regulatory regime. The wide securities fraud scandals that contrast with the paucity of conviction rates are indicative of China’s inadequate public securities law enforcement. Private enforcement efforts, such as securities litigation, help address the disconnect between the securities regulatory regime and investor compensation. Nevertheless, given the immaturity of China’s current legal and institutional framework, various factors preclude private securities litigation from playing an effective role in China’s market regulation and development. Against the background, this Article seeks to explore alternative mechanisms for improving private enforcement in China. After concluding that modeling the U.S. class action system is quite unlikely to work well in China’s sociopolitical and socioeconomic context, this Article explores how the present system of securities fraud litigation should be reformed in order to balance the competing interests of state control, social stability, and minority shareholder protection in the listed companies. In view of the dominance of retail shareholders in the Chinese securities market, and drawing on international experience, this Article proposes a cost-effective and accessible securities arbitration scheme in China for resolving civil compensation claims. This Article argues that the professionalism, procedural flexibility, speed, confidentiality, and cost saving features of arbitration offer much potential as a deterrent and remedial device in addressing the deficiencies of private enforcement of securities regulation during China’s economic transition. * LLB (ECUPL, Shanghai), MCL, SJD (HKU), Fulbright Fellow (NYU). Assistant Professor, Faculty of Law, University of Hong Kong, and Member of the Chartered Institute of Arbitrators, email: guweixia@hku.hk. The author wishes to thank Miss Winnie Chan for her superb research assistance in preparing the draft of this Article. An early version has been presented at the conference From Economic Development to Human Flourishing: The Case of China, at the University of Hong Kong (Dec. 6–7, 2011). The author is grateful for all discussions and comments by the following conference speakers and commentators: Randall Peerenboom, Jacque DeLisle, Pitman Potter, Tom Ginsburg, Frank Upham, Annelise Riles, Albert Chen, Zhang Xianchu, Fu Hualing, Yu Guanghua, Zhao Yun, James Fry, Say Goo, and Shala Ali. All mistakes remain mine. The research is financially supported by China National Social Science Research Fund (Project Code 11BFX143) and University of Hong Kong Small Project Grant (Project Code 201109176056). Northwestern Journal of International Law & Business 33:283 (2013) 284 TABLE OF CONTENTS" @default.
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- W3121266935 date "2013-04-04" @default.
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- W3121266935 title "Securities arbitration in China: A better alternative to retail shareholder protection" @default.
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