A surprisingly strong and concerted regulatory effort is shaking up the Chinese financial sector. New regulators are now in place in each of the three regulatory commissions, and a storm of new financial regulation has ensued. The new effort seems to spring from the domestic shocks of the 2015 stock market meltdown and the 2016 hostile takeover efforts launched by Foresea Life Insurance. These regulatory efforts have an unprecedented level of top political support, exemplified by Xi Jinping’s speech in April. However, there are many unanswered questions about the persistence and purpose of the regulatory crackdown.

The Regulatory Storm: A Surprising Turn in Financial Policy

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