Dr. Huang Haifeng, Ma Hongyi, Niu Yuan

China's Research Center for Economic Transition,
Beijing University of Technology, Beijing, China

With the spread of Internet-related technologies, e-commerce is penetrating various industries. Online trading, as an application of e-commerce, has proliferated rapidly over the past few years. This article describes the current status of online trading development in China from legal, governmental, technical, and market perspectives. With China’s entry into the World Trade Organization (WTO), together with the restructuring and loosening of government policies, the establishment of a sound legal framework, and improvement of the information infrastructure, online trading will bring China’s brokerage industry into a new age. Individual investors in the People’s Republic of China (PRC) are very receptive to self-directed channels. China's regulatory framework is being designed to create a level playing field for all brokerage firms seeking online trading opportunities. There are four models for online trading in China that are the subjects of much debate. However, as online trading affects many aspects of China’s society, it is unlikely that the promotion of online trading in China will be a smooth process. Conflicts between the innovative ideas of online trading and China’s old systems will be unavoidable. Through discussion of these problems, possible future directions and areas of emphasis in the development of online trading in China are presented.