Abstract
China plays a ‘mainstream’ role in global banking negotiations and does not articulate positions that considerably contradict those of the dominant actors (for example, the United States or United Kingdom). Still, the Chinese banking sector differs quite considerably from those of Western economies. In order to understand the Chinese stance on international banking regulation, we need to look at the development of domestic regulation in China. An analysis of institutional changes in Chinese banking regulations highlights the importance of various political-economic factions that have different positions on banking regulation. These factions are a core ingredient of the Chinese state-permeated model of capitalism. Moreover, it is impossible to understand the development of this type of capitalism without taking the size of the economy and the timing of its historical insertion into global capitalism into account.
Similar content being viewed by others
Notes
The only option for circumventing this mechanism is to turn to shadow banking, a strongly growing sector of the Chinese financial system. However, the growth of this sector is very recent and assessments of its size differ greatly (Li, 2013; Breslin, 2014, p. 1005). Correspondingly, this article will focus on the official banking sector.
The reliance on a weak implementation of Western-dominated norms – instead of the development of alternative norms – is not limited to the case of China and banking regulation. In fact, this is an important pattern in many cases of emerging market positions on global economic regulation (see Nölke et al, 2014).
I owe this point to a comment by Andrew Walter.
References
Amsden, A.H. (1989) Asia’s Next Giant: South Korea and Late Industrialization. Oxford: Oxford University Press.
Basel Committee on Banking Supervision (2013) Regulatory Consistency Assessment Programme: Assessment of Basel III Regulations – China. Basel: Bank for International Settlements.
Breslin, S. (2014) Financial transitions in the PRC: Banking on the state? Third World Quarterly 35 (6): 996–1013.
Carney, R.W. (2012) Political hierarchy and finance: The politics of China’s financial development. In: A. Walter and X. Zhang (eds.) East Asian Capitalism: Diversity, Continuity, and Change. Oxford: Oxford University Press, pp. 158–178.
Chancellor, E. (2012) China set to continue supersize binge. Financial Times 4 June.
Chovanec, P. (2012) China real estate unravels. Economonitor 16 May.
Collins, N. and Gottwald, J.C. (2014) Market creation by Leninist means: The regulation of financial services in the People’s Republic of China. Asian Studies Review 38 (4): 620–638.
Fioretos, O. (2010) Capitalist diversity and the international regulation of hedge funds. Review of International Political Economy 17 (3): 696–723.
Fioretos, O. (2011) Creative Reconstructions: Multilateralism and European Varieties of Capitalism after 1950. Ithaca, NY and London: Cornell University Press.
Foot, R. and Walter, A. (2011) China, the United States and Global Order. London and New York: Routledge.
Gerschenkron, A. (1962) Economic Backwardness in Historic Perspective. Cambridge, MA: Harvard University Press.
Halper, S. (2012) The Beijing Consensus: Legitimizing Authoritarianism in Our Time. New York: Basic.
Heep, S. (2014) China in Global Finance: Domestic Financial Repression and International Financial Power. Heidelberg: Springer.
Huang, H. (2010) Institutional structure of financial regulation in China: Lessons from the global financial crisis. Journal of Corporate Law Studies 10 (2): 219–254.
Hung, H. (2008) Rise of China and the global overaccumulation crisis. Review of International Political Economy 15 (2): 149–179.
Jackson, G. and Deeg, R. (2006) How Many Varieties of Capitalism? Comparing the Comparative Institutional Analyses of Capitalist Diversity. Cologne: Max Planck Institute for the Study of Societies. MPIfG Discussion Paper 06/02.
Johnson, C. (1982) MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975. Stanford: Stanford University Press.
Kalinowski, T. (2013) Regulating international finance and the diversity of capitalism. Socio-Economic Review 11 (3): 471–496.
Köllner, P. (2013) Informal Institutions in Autocracies: Analytical Perspectives and the Case of the Chinese Communist Party. Hamburg, Germany: German Institute of Global and Area Studies. GIGA Working Paper 232/2013.
Kynge, J. (2014) The journey from luxury to thrift will be a test of Beijing’s mettle. Financial Times 24 October.
Li, C. (2013) Shadow banking in China: Expanding scale, evolving structure. Paper presented at the Third Conference on Chinese Capital Markets; 6 December, New York University, New York.
Liang, Y. (2010) China and the global financial crisis: Assessing the impacts and policy responses. China & World Economy 18 (3): 56–72.
List, F. (1841) Das nationale System der politischen Ökonomie. Stuttgart: Cotta’sche Verlag.
Liu, W. (2014) Basel III and bank regulation in China. Journal of Legal Technology Risk Management 7 (1): 1–33.
Lo, D., Li, G. and Jiang, Y. (2011) Financial governance and economic development: Making sense of the Chinese experience. PSL Quarterly Review 64 (258): 267–286.
Martin, M.F. (2012) China’s Banking System: Issues for Congress. Washington: Congressional Research Service.
McNally, C.A. (2012) Sino-capitalism: China’s reemergence and the international political economy. World Politics 64 (4): 741–776.
Mu, Y. (2008) China’s financial reform and opening-up over the past three decades. Speech to 2008 China-US Forum and Gala. Bethesda, MD, 23 November.
Nel, P. (2010) Redistribution and recognition: What emerging regional powers want. Review of International Studies 36 (4): 951–974.
Nölke, A. (2011) Transnational Economic Order and National Economic Institutions: Comparative Capitalism Meets International Political Economy. Cologne: Max-Planck-Institute for the Study of Societies. MPIfG Working Paper 11/3.
Nölke, A. (2012) The rise of the ‘B(R)IC’ variety of capitalism: Towards a new phase of organized capitalism? In: H. Overbeek and B. van Apeldoorn (eds.) Neoliberalism in Crisis. Basingstoke, UK: Palgrave Macmillan, pp. 117–137.
Nölke, A. (ed.) (2014) Emerging Markets Multinational Corporations: State Capitalism 3.0. Basingstoke, UK and New York: Palgrave Macmillan.
Nölke, A. and Vliegenthart, A. (2009) Enlarging the varieties of capitalism: The emergence of dependent market economies in East Central Europe. World Politics 61 (4): 670–702.
Nölke, A., ten Brink, T., May, C. and Claar, S. (2014) Domestic structures, foreign economic policies and global economic order: Implications from the rise of large emerging economies. European Journal of International Relations, advance online publication November 25, doi: 10.1177/1354066114553682.
Okazaki, K. (2007) Banking System Reform in China: The Challenges of Moving toward a Market-Oriented Economy. Santa Monica, CL: RAND. Occasional Paper 194.
Pettis, M. (2010) China’s financial evolution will take the slow road. Financial Times 22 January.
Pilling, D. (2012) Don’t believe the bears: The wobbly panda won’t fall yet. Financial Times 23 May.
Ping, L. (2011) What Regulatory Policies Work for Emerging Markets? Tokyo: Asian Development Bank Institute. ADBI Working Paper Series no. 265.
Ping, H.W. (2014) Banking Regulation in China: The Role of Public and Private Sectors. Basingstoke, UK: Palgrave Macmillan.
Qiyuan, X. (2013) Has the Chinese central bank really taken a hard line on liquidity? Bruegel Comment, 1 July, http://www.bruegel.org/nc/blog/detail/article/1123-has-the-chinese-central-bank-really-taken-a-hard-line-on-liquidity/, accessed 26 November 2014.
Rabinovitch, S. (2012) High debt means high time for Beijing to open its wallet. Financial Times 6 June.
Rabinovitch, S. (2013) Bank vows to avert China’s Lehman moment. Financial Times 26 June.
Rabinovitch, S. and Hook, L. (2012) China warning over steel loans. Financial Times 4 June.
Sender, H. (2014) China faced debt crunch as property values fall. Financial Times 18 November.
Shih, V. (2008) Factions and Finance in China: Elite Conflict and Inflation. Cambridge, UK: Cambridge University Press.
Storz, C., Bruno, A., Casper, S. and Lechevalier, S. (eds.) (2013) Asian capitalisms: Bringing Asia into the comparative capitalism perspective. Socio-Economic Review 11 (2): 217–408.
Ten Brink, T. and Nölke, A. (2013) Staatskapitalismus 3.0. dms – der moderne staat – Zeitschrift für Public Policy, Recht und Management 6 (3): 21–32.
Vermeiren, M. (2014) Power and Imbalances in the Global Monetary System: A Comparative Capitalism Perspective. Basingstoke, UK: Palgrave Macmillan.
Wade, R.H. (2004) Governing the Market: Economic Theory and the Role of Government in East Asian Industrialization. Princeton, NJ: Princeton University Press.
Walter, A. (2008) Governing Finance: East Asia’s Adoption of International Standards. Ithaca, NY: Cornell University Press.
Walter, A. (2010) Chinese attitudes towards global financial regulatory co-operation: Revisionist or status quo. In: E. Helleiner, S. Pagliari and H. Zimmermann (eds.) Global Finance in Crisis: The Politics of International Regulatory Change. London and New York: Routledge, pp. 153–169.
Walter, C.E. and Howie, F.J.T. (2011) Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise. Singapore: John Wiley.
Walter, A. and Zhang, X. (eds.) (2012a) Debating East Asian capitalism: Issues and themes. In: East Asian Capitalism: Diversity, Continuity, and Change. Oxford: Oxford University Press, pp. 3–25.
Walter, A. and Zhang, X. (eds.) (2012b) Understanding variations and changes in East Asian capitalism. East Asian Capitalism: Diversity, Continuity, and Change. Oxford: Oxford University Press, pp. 247–280.
Witt, M.A. and Redding, G. (eds.) (2013) The Oxford Handbook of Asian Business Systems. Oxford: Oxford University Press.
Woods, N. (2010) Global governance after the financial crisis: A new multilateralism or the last gasp of the great powers. Global Policy 1 (1): 51–63.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Nölke, A. International financial regulation and domestic coalitions in state-permeated capitalism: China and global banking rules. Int Polit 52, 743–759 (2015). https://doi.org/10.1057/ip.2015.17
Published:
Issue Date:
DOI: https://doi.org/10.1057/ip.2015.17