Analysis of the legal and regulatory problems in the development of foreign private equity in China in a comparative view to the private equity industry in the UK and the U.S.

Abstract

Private equity has been developing as an industry in the UK and the U.S. for decades and at present it is the focal point of regulation for said to be partly responsible causing the 2007 to 2008 financial crisis. However, the situation of private equity in China differs tremendously to that in the UK and the U.S. in terms of every aspect such as investment routes, system of regulation and divestment considering that private equity has only been growing fast in China for merely a decade. The laws and regulations governing each of the aspects in the three countries are on different levels in terms of maturity not to mention the fact that foreign private equity under Chinese law is only a relatively new area.

Foreign private equity laws and regulations are gaining attention and need attention as foreign private equity has been developing fast with an enormous amount of capital involved and there is not a well-established system of laws and regulations governing important issues such as its investment and divestment in China. The thesis will look into the legal and regulatory problems encountered in the course of development of foreign private equity in China and it will try to solve such problems by studying the private equity industry in the UK and the U.S.. Each chapter of the thesis will land on one problem and all the chapters together will try to solve one question: how to improve the legal and regulatory system of foreign private equity in China? Based on the legal and regulatory advice given in each chapter, the thesis will argue that the most important aspect missing in the current system, compared to its counterpart in the UK and the U.S., is the absolute authority of basic legal principles such as rule of law and freedom of contract.

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ORCID for Andrea Lista: orcid.org/0000-0002-4234-0914

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