黑料社区

The development of capital markets has been a core focus of financialization research. For Epstein, financialization 鈥�鈥�, while Pike and Pollard define financialization as the 鈥�鈥�. Other scholars also attribute a significant role to capital markets in financialization processes, be it in the , the rise of , or 鈥�鈥�. At the heart of and as a precondition of many aspects of financialization stand capital markets and their development.聽

This is not only the case when it comes to financialization in advanced economies, but also with respect to the study of . Financialization processes are not uniform, they are rather variegated and refracted by national institutional settings that lead to . As Lapavitsas and Powell emphasized, 鈥�鈥�. This has also been picked up in debates about the relationship between financialization and the state. Previously, many scholars argued that financialization often results in a and the effects on developing economies are often described as potentially negative with financialization for instance or . But stemming from earlier discussions on , more recent scholarship has highlighted that . It argues that an increasing takes place in which state and (quasi-)state institutions often co-constitute financialization processes.聽

Contributing to the growing literatures on variegated financialization and the state, in a paper titled 鈥�鈥� (recently published in ) I argue that states are not only important actors facilitating financialization but can also exercise a considerable degree of control over financialization, thereby shaping its very form. Instead of a financialization process that , what we see in China is a 鈥榝inancialization with Chinese characteristics鈥� where the state actively tries to manage financialization and its social outcomes.聽

Since the global financial crisis 2007鈥�2009, capital markets have gradually become an important pillar of China鈥檚 socio-economic system of authoritarian state capitalism. Time and again, the Chinese government officially declared that in allocating resources and facilitating growth in the Chinese economy, deciding to give finance a leading role for national development. Consequently, the financial sector expanded rapidly in recent years. Between 2003鈥�2006 and 2014鈥�2017, the average total value of stocks traded increased from 27.2 to 193.2% and market capitalization of listed domestic companies almost tripled from 28 to 67% of GDP. Further, securities market financing by Chinese firms increased from to of Total Social Financing, while the almost doubled from 5% to 9%. By 2019, China has become home to the 2nd largest stock, bond and futures markets in the world. Capital markets have become a crucial part in China鈥檚 political economy, contributing to the increasing financialization of China鈥檚 authoritarian capitalism (see for instance the excellent work by , , or ).听

But although finance in China is expanding and permeating evermore aspects of economic and political life, this occurs within the context of China鈥檚 socio-economic system of authoritarian state capitalism in which the Chinese Communist Party aims to maintain its control over socio-economic development, in part by managing policy uncertainties through the financial sector. Hereby, the authorities try to actively manage financialization to achieve developmental goals. China鈥檚 president Xi Jinping for instance made clear that the tasks of China鈥檚 financial sector were: 鈥�鈥�. Importantly, this is not done through brute force or command-and-control mechanisms, but through 鈥榩ivotal points鈥� in market infrastructures that enable the management and steering of financialization processes.

Based on 100 expert interviews conducted with market practitioners in mainland China, Hong Kong and other international financial centres between June 2017 and October 2019, the article analyses the crucial role of China鈥檚 state-owned securities exchanges in the development and management of Chinese capital markets between 2009鈥�2019. More than just marketplaces, as providers of market infrastructures . From market data and indices, listing/creation and trading of various securities, commodities and derivatives, to post-trading activities such as central clearing, settlement, custodian and collateral management services 鈥� exchanges decide the 鈥榬ules of the game鈥� and act as gatekeepers, deciding who gets in, what is traded and how trading is conducted. Thereby, they are crucial to shaping capital markets. Embedded within the structures that permeate China鈥檚 authoritarian capitalism, China鈥檚 exchanges fulfil an important role as intermediaries between the Chinese state, society and finance.聽

Through such an analysis of the policies and practices of exchanges in managing capital markets, we can gain insights in how Chinese authorities aim to steer China鈥檚 variegated financialization process. Capital markets can, thereby, be understood as a site where the authorities exercise 鈥�鈥� which enables them to govern social and economic life. Control in this context should be understood both as exerting control within financialization by monitoring, regulating and intervening into capital markets, as well as exerting control through financialization by directing capital market outcomes towards the accomplishment of certain economic and political objectives linked to state policies that target different aspects of China鈥檚 authoritarian capitalism: to decrease financial risk (financial sector); to stabilize the socio-political system through guiding citizens鈥� market participation (society); to make finance serve the real economy (national development); and to facilitate political-economic reform processes (listed companies). Further, these mechanisms stay in place despite an increasing inflow of international investors (global integration). The article analyses these five dimensions in detail.

Exhibition Hall at Zhengzhou Commodity Exchange

While China鈥檚 capital markets have developed rapidly in recent years, they function differently from and fulfil a different role than 鈥榞lobal鈥� capital markets whose primary function is to enable the generation of private profit and who often supersede state logic and constrain state power. Rather than a break with China鈥檚 authoritarian capitalism, the activities of the Chinese exchanges help to sustain and facilitate China鈥檚 socio-economic system. By extending state control within and through capital markets, they shape the financialization of China鈥檚 political economy in accordance with its authoritarian capitalism. Thereby, this single case study on China鈥檚 capital market development sheds light on debates about neoliberal convergence, models of capitalism and trajectories of financialization.聽

Since the global financial crisis, China has become the world economy鈥檚 engine, . Its capital markets have developed and internationalized to an unprecedented degree, turning China into an important player in global finance, but one that plays according to its own rules. In the face of the growing systemic competition between the US and China that offer different visions of organising financial and economic life, more research is required to understand the mechanisms, form and content of this financialization with Chinese characteristics and its place within China鈥檚 authoritarian state capitalism.聽

Johannes Petry is a PhD Candidate in International Political Economy and a Research Fellow at the Centre for the Study of Globalisation & Regionalisation, University of Warwick. .