Old Wines in New Bottles? Private Securities Litigation in China’s New Securities Law

Abstract

Private securities litigation has been very weak since the establishment of China’s stock market some 30 years ago. A new law on securities took effect in March 2020 and introduces some reformist changes to this area. This article will examine the likely effect of the new Securities Law on this form of litigation. In particular, it will examine China’s most celebrated ‘quasi-class action’ system, i.e. Special Representative Litigation. This procedure is borrowed from Taiwan’s non-profit organization model. The essay argues that, since the new Securities Law has made only limited efforts in addressing the primary reason for the weak private securities litigation, namely, lack of judicial independence, it is unlikely to make any significant changes to private securities litigation in China.