Internet finance governance in China: what governance model is desirable

In the past decade, internet finance has developed significantly in China. Yet the country lacks a robust governance system on internet finance activities. Several cases of fraud have impacted the market and damaged the interests of a large number of investors. As a result of these risks, the Chinese Central Government has launched a nation-wide crackdown. The rise (and associated risks) of internet finance in China represents a typical example of how a governance model for internet finance can be developed. This article analyses the internet finance governance model in China, with reference to the government's recent crackdown on illegal activities in this sector. It suggests that a desirable internet finance governance model in China should be tailored to prevent risk, encourage innovation and address the problem of information asymmetry.