ABSTRACT
Chinese peer-to-peer lending (P2P) is now the largest in the world by far, at over $53 billion in loans intermediated in 2014. 1 This rapid fi nancial development might seem surprising, as the typical view among China watchers has been that fi nance has lagged behind development in other sectors and is dominated by large, state-owned banks. Literature on Chinese fi nance in the West has focused on “fi nancial repression” in its highly regulated fi nancial markets, but fundamental changes in China’s fi nancial system are underway. These changes have weakened existing regulations and opened up the playing fi eld to a diverse body of new fi nancial institutions.
