New Thinking in Financial Market Regulation: Dismantling the “Split Share Structure” of Chinese Listed Companies

China’s distinctive set of stock market institutions was introduced in 1990. Among the characteristics of China’s stock markets was a strict separation between different categories of investors. Listed companies issued different categories of shares to state shareholders, domestic corporate investors, domestic individual investors, and foreign investors. By 2005, the barriers segmenting China’s stock market had been significantly relaxed. Domestic investors were allowed to purchase shares previously reserved for foreign investors, and approved foreign investors were allowed to purchase shares previously earmarked for domestic individuals. Nevertheless, a crucial barrier remained. An ongoing debate among Chinese academics, investors, and policy makers focused on how to resolve the “split share structure” (guquan fen zhi) in which a minority of shares were tradable while the majority of shares (namely those reserved for domestic corporate and state shareholders) were excluded from the market. The split share structure was blamed for distorting prices and inhibiting development of the stock market. This paper analyzes the policy adopted to address the split share structure. To what extent does this policy change reflect new thinking on the part of China’s market regulators? This paper argues that analysis of policy making in China’s capital markets can help to distinguish between two competing assessments of China’s political economy. One account sees China pursuing a gradualist strategy, slowly but steadily expanding the role of markets. Another account sees China trapped in a semi-marketized and increasingly corrupt development pattern. The implementation of the split share structure reform program provides evidence to support the gradualist account of incremental, but persistent, reform. Mary Comerford Cooper is an assistant professor in political science at the Ohio State University. Her recent research focuses on the politics of financial markets in China and Taiwan. Earlier versions of this paper were presented at the Comparative Politics Research Workshop/ Globalization, Institutions and Economic Security Workshop at Ohio State University in May 2007, and at the annual meeting of the Association for Chinese Political Studies in July 2007. I benefited greatly from the constructive and insightful comments of Bj?rn Alpermann, Melanie Barr, Jean-Marc Blanchard, Sarah Brooks, Joseph Fewsmith, Sujian Guo, Dane Imerman, Ryan Kennedy, Marcus Kurtz, Xiaoyu Pu, James Reilly, Alex Thompson, Daniel Verdier, Jianwei Wang, Alan Wiseman, Bin Yu, and an anonymous reviewer. I am also grateful for Lan Hu’s exceptional research assistance. All remaining flaws are purely my own.     

Negotiating the EU–U.S. Open Aviation Area Agreement 2007 in the Context of Transatlantic Airline Regimes Since 1944

Between 1944 and 2002, the United States sought to create a competitive and commercially driven international civil aviation regime. It tried to peel away politically inspired regulations, which fragmented the marketplace, and deliver efficiencies and consumer benefits. In contrast with the American liberal tradition—albeit with limitations—the industry in Europe was over-regulated and largely based on subsidised state-owned carriers with international market quotas. Thus for many years Europe and the U.S. followed different paths; but political and economic dynamics conspired together in the 1980s and early 1990s to produce remarkable change in the European Community and, by 1997, there were the makings of a competitive and lightly regulated single market, which brought it close to U.S. practice. Since 2002, the United States has been less liberal in its airline policies; the EU has been more liberal. It would be an irony indeed if the great regime liberaliser since 1944 were now to become a force of regulatory conservatism that denied consummation to the vision of a transatlantic open aviation area that could be a magnet to draw in the rest of the world into a truly global commercial airline market.     

Der sogenannte Auffüllungsanspruch bei der Mietkaution – insbesondere in der Insolvenz

In einem rezenten Judikat hatte sich der OGH mit einer zentralen Frage zur Mietkaution zu befassen. Entscheidungswesentlich war, ob und aus welchem Rechtsgrund der Bestandgaber im Fall von Mietzinsrückständen die Wiederauffüllung der vom Bestandnehmer bestellten Kaution auf den ursprünglichen erlegten Betrag verlangen kann. Zu prüfen war dabei auch die Behandlung dieses Anspruchs in der Insolvenz des Bestandnehmers. Der Beitrag stellt die wesentlichen Aussagen der Entscheidung vor, analysiert ihre Konsequenzen kritisch und zieht Schlussfolgerungen für die Praxis.     

Should the Law Convict Those Who Act from Conviction? Reflections on a Demands-of-Conscience Criminal Defense

How should the judge or jury in a just criminal court treat a civil disobedient, someone who performs a conscientiously motivated communicative breach of the criminal law? Kimberley Brownlee contends that all else equal a court of law should neither convict nor punish such offenders. Though I agree with this conclusion, I contend that Brownlee mischaracterizes the nature of the criminal defense to which civil disobedients are entitled. Whereas Brownlee maintains that such actors ought to be excused for their criminal breach, I argue that they ought to enjoy a justification defense. Acts of civil disobedience are not (morally) wrongful violations of the law for which an actor ought not to be blamed; rather, they are violations of the law that are not (morally) wrong in virtue of their illegality. It is the absence of wrongdoing, and not merely the absence of fault, that renders the conviction and punishment of those who perform acts of civil disobedience inappropriate.