Informal Finance in China: Risks, Potential and Transformation

中国近几十年来的快速经济增长归功于它对非正式合同和基于信任的关系的依赖。这一说法反映了中国缺乏全球北方市场经济中一些更正式的法律和监管机构。尽管关于中国缺乏正式的市场治理法律机制的说法可能有些言过其实，但事实是，非正规金融，特别是商业信贷、家庭贷款和公共投资，在支持中国的成长方面发挥了重要作用。考虑到正规部门的局限性，非正规金融的盛行对中国的经济构成了一个重要的灵活性来源。正规部门仍然由国有银行主导，主要向国有企业放贷。非正规金融也在迅速发展，并与利用互联网技术通过众筹等机制提供金融(如金融科技)相融合。然而，中国经济对非正规金融的依赖也有不利之处，它与金融科技的融合带来了重大风险。庞大的影子银行业，由于其定位不在适用于主流银行的大多数监管规定之外，增加了系统性风险。正规部门和非正规部门在一种不稳定的关系中共存：它们可能相互替代，或提供互补的融资模式，但它们也可以运行以加强和放大系统性风险，就像2011年后的温州危机一样。同样，金融科技的崛起也是一把双刃剑。一方面，云计算和大数据可能正在促进新形式的社会信贷和集体投资计划，这些计划有可能满足不断增长的社会信贷部门的需求。众筹可能为初创企业和创新创业提供一种新的、灵活的融资形式。然而，这些新的融资形式也有可能削弱或削弱旨在维持市场透明度的多余监管，并加剧投资者面临的风险。在此背景下，我们建议进行一个多方法的研究项目，以探索中国的非正规金融现象，识别与之相关的风险和潜力，并评估监管如何在不牺牲与之相关的创新性和灵活性的情况下最好地应对风险，尤其是在“金融科技”的背景下。这些项目将分为四个工作包，与ESRC-NSFC呼吁中确定的五个主题中的三个相对应：WP1[主题1]：了解非正式融资的限制WP2[主题2]：监管影子银行WP3[主题5]：新技术的潜力促进金融创新和发展(‘金融科技’)WP4[主题2]：建立社会信用体系

China's rapid economic growth in recent decades has been attributed to its reliance on informal contracting and trust-based relationships. This claim is a reflection of the absence in China of some of the more formal legal and regulatory institutions of the market economies of the global north. Although the claim that China lacks formal legal mechanisms of market governance may have been somewhat overstated, it is the case that informal finance, particularly in the form of trade credit, family lending and communal investing, has played a major role in supporting China's growth. The prevalence of informal finance constitutes a significance source of flexibility for China's economy given the limitations of the formal sector, which remains dominated by state-owned banks lending largely to state-owned enterprises. Informal finance is also evolving quickly and is converging with the use of internet technologies to deliver finance ('fintech') through such mechanisms as crowdfunding. However, there are downsides to the reliance of the Chinese economy on informal finance and significant risks arise from its convergence with fintech. The large shadow banking sector, by virtue of its positioning outside most of the regulations applying to mainstream banks, adds to systemic risks. The formal and informal sector coexist in an uneasy relationship: they may substitute for each other, or provide complementary modes of finance, but they can also operate to reinforce and magnify systemic risks, as in the case of the crisis in Wenzhou after 2011. Similarly, the rise of fintech is a double edged sword. On the one hand, cloud computing and big data may be facilitating new forms of social credit and collective investment schemes which have the potential to meet the needs of the growing social credit sector. Crowdfunding may provide a new and flexible form of financing for start-ups and innovative ventures. However, these new forms of finance also have the potential to undercut or render otiose regulations designed to maintain market transparency, and to intensify the risks facing investors. Against this background, we propose to conduct a multiple methods research project which will explore the phenomenon of informal finance in China, identify the risks and potential associated with it, and assess how regulation can best respond to the risks while not sacrificing the innovations and flexibility associated with it, particularly in the context of 'fintech'. The projects will be organised in four work packages which correspond to three of the five themes identified in the ESRC-NSFC Call:WP1 [theme 1]: Understanding the limits of informal financingWP2 [theme 2]: Regulating shadow bankingWP3 [theme 5]: The potential of new technology to promote financial innovation and development ('fintech')WP4 [theme 2]: Building a social credit system