Focusing on China’s economic rise and the transformation of the global financial system, my research investigates the changing dynamics of financial globalisation and its impact on the global norms, institutions and governance that underpin the global economy. Contributing towards this aim, I have developed an encompassing research agenda for the coming years which addresses three interlinked areas – the development and internationalisation of China’s financial system (main empirical focus), the role of infrastructures in the politics global finance (conceptual) and how post-crisis transformation of the global financial system impact the global economic order (‘big picture’).
China’s capital markets & their integration into global finance
In this first research area, I analyse the post-financial crisis reform and opening process of China’s financial system within the context of a US-dominated, liberal global financial order. In 1989, capital markets did not exist in China. Fast forward three decades, and China is home to the 2nd largest futures, equity and bond markets in the world. And while China’s capital markets were closed to the outside world for decades, they have become connected to both regional and global financial markets at an unprecedented pace.
Drawing on extensive fieldwork in mainland China, Hong Kong, Singapore, London and Frankfurt where I conducted 200+ expert interviews and collected ethnographic data from 40+ financial industry events, I investigated how the capital markets that have developed in China function quite differently from global capital markets. Instead of ‘global’ markets which facilitate the power of private financial actors, Chinese capital markets are intricately linked with state control and national development goals defying liberal perceptions of how markets ought to operate.. Rather than Big Bang style liberalisation, China’s financial opening is therefore a controlled, reversible process and its relation with global finance ambiguous. Thereby, my research contributes debates on financialization, state capitalism and neoliberalism in the context of China’s changing political economy.
In my PhD I thereby focus on Chinese (stock and derivatives) exchanges who organise markets in ways that facilitates the state’s ability to control markets and to direct their outcomes towards certain state policies, while my Postdoctoral Fellowship at the SCRIPTS Cluster of Excellence investigates the international implications of this development for the global financial order.
Related research projects:
‘Pathway to instability? Capital markets with Chinese characteristics’ (2016-2020)
‘Wall Street in China: Capital markets, Chinese state capitalism & the liberal global financial order‘ (2020-2021)
The politics of financial market infrastructures
In this second research area, I explore the politics of financial market infrastructures as an analytical perspective to understand the global financial system and China’s integration therein. Where do markets come from? Instead of emerging spontaneously, financial markets require the pre-existence of specific infrastructural arrangements that enable the functioning and shape the workings of these markets. Data, indices, products, trading platforms and rules, clearing and settlement systems – these and others are the necessary conditions for financial markets to work in the first place.
In this more conceptual work, I focus on those actors that govern financial infrastructures and thereby shape how the financial systems functions: how exchanges organise equity markets, how index providers make investment decisions for passive investments, how clearing houses decide how risk is managed in derivatives markets or how ESG rating firms determine what counts as sustainable investment. But rather than a technical exercise, these infrastructures are informed by different politics which have important consequences for financialization processes, the governance of finance as well as the power distribution between states and markets, between various private and public actors.
In this conceptual work, my research focuses on the emergence and transformation of specific actors that govern these infrastructures and shape how the global financial system functions. Whether weaponised interdependence, structural power, private authority, economic statecraft or global order, a focus on infrastructures contributes to a more nuanced analysis of these core concepts of IR/IPE scholarship.
Related research projects:
‘Steering capital: the international political economy of index providers’ (2019-2021)
Comparing emerging markets: China, East Asia and the BRICS
In this third research area, I am interested in the comparative analysis of financial systems in China and other emerging markets. Global finance has undergone significant changes since the global financial crisis 2007-2009 with the rise of China and other emerging markets which significantly impact the dynamics of financial globalisation and its impact on the global norms, institutions and governance that underpin the global economy.
As the principle investigator of the DFG-funded StateCapFinance research project at Goethe University Frankfurt (2020-2024), I investigate similarities and differences in the relationships between states and (global) financial markets in China, the BRICS and East Asia as well as US/European markets. By comparatively analysing market structures, large financial datasets and interview data, we investigate whether financial markets are informed by varying institutional logics, consequently function differently and lead to different societal outcomes. We further investigate how these changing post-crisis reconfigurations within the global financial system such as the rise of China – by itself or within East Asia and the BRICS – then impact the norms, institutions and power constellations that underpin the global economy.
I investigate how the first two areas impact upon post-crisis reconfigurations in global capitalism – how they contribute to the ‘big picture’. Global finance has undergone significant changes since the global financial crisis 2007-2009. The way policymakers look at financial markets has changed with the advent of macro-finance and balance-sheet analyses of the economy. Regulation has changed certain areas of finance, banks for instance have borne the brunt of regulatory costs, while others – such as the shadow banking sector – have remained relatively unchanged. New actors have emerged in global finance: proprietary trading firms have become a dominant force with the spread of high-frequency trading, clearinghouses have gained in prominence with regulations such as EMIR or Dodd-Frank, asset managers have become the new universal owners in the new age of passive investments. Further, alternative ways to organise financial markets have emerged, notably in emerging markets such as China, India or Russia – development finance is shaken up by new actors such as the AIIB, currency internationalisation has become an important issue, and the Belt and Road Initiative is bound to reshape global financial and trade flows. Together, these post-crisis transformations of global finance significantly impacts the dynamics of financial globalisation and its impact on the global norms, institutions and governance that underpin the global economy.
My current research thereby focuses on the emergence of new power and actor constellations in global finance, changing governance, investment and trading patterns in financial markets as well as investigating rise of Asia and other emerging markets in the global financial system and their impact on the global financial order. Next to the SCRIPTS-funded ‘Wall Street in China’ research project, I am working on these questions in my capacity as the Principal Investigator of the DFG-funded ‘Finance under State Capitalism’ research project (StateCapFinance).
Related research projects:
‘Capital markets, Chinese state capitalism & the liberal global financial order’ (2020-2021)
‘Financialization under state capitalism: steering capital markets in the BRICSS’ (2020-2024)
Next steps: The geopolitics of global finance in the context of US-China competition
Currently, I am developing a larger research project that focuses on examining growing geopolitical contestations within the global financial system in the context of US-China competition – contributing to a better understanding analysis of contemporary reconfigurations within the global economy (‘big picture’). This larger project thereby weaves together and further develops threads from my three existing research areas.
First, while I previously analysed China’s rise in global finance (research area 1), this project focuses on the geopolitical backlash that has resulted from China’s rise and how China adapts its financial opening as a response to this (e.g. pursuing commodity pricing power). Second, while I previously focused on how state-market relationships are facilitated through financial infrastructures (research area 2), this project analyses their role in mediating power relations between states. I thereby analyse both failed and successful attempts in weaponizing them as part of geopolitical conflicts (e.g. failed US investment ban). Third, while I previously conducted a comparative analysis of state-finance configurations across emerging markets (research project 3), this project utilises these findings to understand how diverging state-finance configuration enable or hinder states’ geopolitical strategies and facilitate new geographies of financial cooperation (e.g. BRICS de-dollarisation).