China’s Securities Law Reform: Market Practice, Regulatory Innovation, and Global Integration

This article examines the development of China’s capital markets and assesses key securities and corporate law reforms introduced in the 2010s and 2020s to build a more transparent, market-oriented system with stronger investor protection. First, it analyses the expansion of China’s multi-layered capital markets, focusing on the establishment of the Shanghai STAR Market (2019) and the Beijing Stock Exchange (2021), which were created to meet the diverse financing needs of companies across different sizes, industries, and development stages, while aligning with the varied risk appetites of investors. Second, it evaluates core legal reforms, particularly the PRC Securities Law 2020 and PRC Company Law 2023. A pivotal change is the shift from an approval-based to a registration-based IPO system, which reduces administrative discretion, strengthens information disclosure, increases penalties for financial misconduct, and improves investor protection through collective and class action mechanisms. The Company Law further introduces dual-class share structures, more flexible board governance, clearer directors’ duties, stronger accountability, and enhanced private enforcement. Third, the article explores China’s internationalisation strategies through Chinese Depositary Receipts (CDRs) and cross-border Stock Connect schemes such as the Shanghai–London Stock Connect, which facilitate global capital flows and enable overseas-listed Chinese firms to access domestic markets. The article argues that China’s securities law reforms strike a balance between market efficiency and investor protection, regulatory modernisation and stability, and domestic development and international integration.