Problems and solutions with China’s P2P lending regulation

Problems and solutions with China’s P2P lending regulation

Hang Yin

International Journal of Industrial and Business Management

Here we find out the problems and possible solutions with China’s P2P lending regulation on the basis of above chapters’ analysis and conclusions. The main problems and corresponding solutions are as follows: •China’s current regulation pattern of institutional regulation is not effective, creating legal blankness and blurs. China is supposed to implement the functional regulation system as an alternative.•It is reasonless to assign local governments to regulate P2P lending within respective jurisdictions, as P2P lending has the nature of revenue localization but risk nationalization. Banking regulatory bureaus that are vertically managed by the central government are more suitable to become local regulators for P2P lending.•China’s P2P lending industry association still has a great distance to become a real industry self-regulation organization like P2PFA in the UK, since that it has a too low coverage rate. Eligible platforms should be required to join in the industry association to improve the association’s management effectiveness.•Establishing a new P2P lending database is a waste of current resources. The PBC credit reference center is a relatively well-developed credit review system. If P2P platforms are permitted to access to the PBC credit reference system, there is no need to invest more financial and material resources in founding a new database.•Regulation on securitization in P2P lending industry is ignored by the regulators. P2P lending securitization is an inevitable trend, which needs scientific guidance and standardization. The problems of risk responsibility subject, information disclosure, and excessive securitization should be paid more attention when designing related mechanisms.•Rules about risk reserve mechanism are omitted by the regulators. Real risk reserve funds can protect investors to some extent and will not result in liquidity risks for platforms. A qualified risk reserve mechanism should be independent, with limited protection, and full information disclosure.

Keywords: P2P, business models, risks, regulation

Free Full-text PDF

How to cite this article:
Hang Yin.Problems and solutions with China’s P2P lending regulation. International Journal of Industrial and Business Management, 2017; 1:3. DOI:10.28933/ijibm-2017-03-1801


1. CBRC. (2016). The State Council Issued the Plan for Promoting the Development of Financial Inclusion (2016-2020) . Retrieved 24 July, 2016, from
2. CMCA. (2016). CMCA Member list. Retrieved 24 July, 2016, from
3. Gallant, C. (2016). What is securitization?. Retrieved 24 July, 2016, from
4. Guo, L., & Xia, D. (2014). In search of a place in the sun: the shadow banking system with Chinese characteristics. European Business Organization Law Review, 15(03), 387-418.
5. Harvard. (2014). The Functional Regulation of Finance. Retrieved 23 July, 2016, from
6. Huang, H. (2010). Institutional structure of financial regulation in China: Lessons from the global financial crisis. Journal of Corporate Law Studies, 10(1), 219-254.
7. Lingyi. (2015). China’s P2P lending service industry white paper. Beijing: Oriental Press.
8. NPC. (2004). Securities Law of the People’s Republic of China. Retrieved 24 July, 2016, from
9. PBC. (2015). Credit Reference Center Operation Report (2004-2014). Retrieved 24 July, 2016, from
10. PBC. (2015). The Guidelines on Promoting the Healthy Development of Internet Finance. Retrieved 21 July, 2016, from
11. PKULAW. (2013). Regulation on the Administration of Credit Investigation Industry. Retrieved 24 July, 2016, from
12. Sun, J. (2011). Study on the financial supervision and anti-monopoly regulation of integration of industry and finance—in view of confronting global financial crisis and mitigating domestic financial risks. Frontiers of Law in China, 6(2), 284-315.
13. Treasury. (2016). Opportunities and Challenges in Online Marketplace Lending. Retrieved 21 July, 2016, from
14. Wang, Y.J., Lv, H.M., and Wang, Q. (2015). Some legal suggestions on P2P lending’s guarantee mode. Retrieved 24 July, 2016, from
15. Yicai. (2015). NFCS Solves Credit Review Problem. Retrieved 24 July, 2016, from
16. Zopa. (2016). How Zopa minimises risk. Retrieved 24 July, 2016, from

Terms of Use/Privacy Policy/ Disclaimer/ Other Policies:
You agree that by using our site, you have read, understood, and agreed to be bound by all of our terms of use/privacy policy/ disclaimer/ other policies (click here for details).

This work and its PDF file(s) are licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.