ABSTRACT
International money and global finance have been at the heart of IPE since the inception of the field in the West in the 1970s (Strange, 1971, 1986; Cohen, 1977, 1986). However, in China, this was not the case. A survey3
of the key literature shows that international trade, especially world trade and investment integration, occupied the centre of IPE research in China starting in the early 1990s, and this remained the case until just after China’s accession to the World Trade Organization (WTO). In this article, the ‘key’ Chinese IPE literature denotes the five leading academic journals that publish manuscripts by scholars who self-identify as studying ‘IPE’: World Economics and Politics (published by the Chinese Academy of Social Sciences (CASS)), International Economic Review (published by CASS), Comparative Economic and Social Systems (published by the Central Compilation and Translation Bureau of the Chinese Communist Party), International Politics Quarterly (published by the School of International Studies, Peking University) and, interestingly, Studies on Marxism (published by CASS)4-plus the formative IPE books, both single-authored and edited. The attention to international trade was not surprising given the re-
alities of the first decade of IPE in China (1990s), when export-oriented growth became the backbone of China’s development and given the ongoing tensions in theUS-China relationship during that period because of the yearly debate in the United States Congress over whether the U.S. would grant China “Most-FavoredNation” (MFN) status or not, the Chinese state dedicated priority and resources to securing Permanent Normal Trade Relations (PNTR) status (signed into law on 10 October 2000 by President Bill Clinton), which put an end to the MFN debates, and also to preparing for China’s WTO entry 11 December 2001). The latter included directing the aid of Western donors to WTO capacity building and modernizing investment arrangements (less foreign assistancewas directed to central banking and financial reforms).5 Academic researchers in legal studies, economics, international relations (IR) and IPE participated in the preparatory work for WTO accession and this, in turn, resulted in numerous books on the global trading regime, and China and the WTO. A survey of the five leading journals shows, however, that interest in in-
ternational financial and currency issues was triggered by the 1997-98 Asian financial crisis (AFC) and then the launch of the Eurozone on 1 January 1999. These events resulted in eight articles in 1998 and another eight articles in 1999 within the leading journals (see Table 1). Representative works by Chinese economists Zhang Liqing (1998) and Jiang Boke et al. (1999), during and immediately after the Asian financial crisis, analysed the dangers of speculative cross-border capital flows and premature capital account liberalization. The research gave rise to debate inside Chinese IPE circles on the pros and cons of currency convertibility, the preconditions and reforms needed to deal with non-performing loans in
the banking sector, and the dangers of weak corporate governance in the state banks. Zhu Feng (1998), Jia Baohua (1999), Lin Limin (1999) and Yang Luhui (2001) examined how the regional crisis would give rise to a period of hardship for ‘Asian capitalism’ and lead to increased tensions in the long term as the representatives of European and American capitalism tried to contain the Asian variants. Chinese IPE scholars also predicted that China was moving to the centre of gravity in the Asia-Pacific region and that the region as a whole was shifting toward multipolarity. Thepreparations andactual launchof the euro also resulted in one article
in 1998 and three articles in 1999 in the CASS journal,World Economics and Politics. The articles examined the implications of the rise of the euro on the global currency and geopolitical landscape, and explored how China should respond.Li Shuxun (1998) analysedhow the launchof theEurozone would affect US-European relations and predicted that the euro would become one of the main currencies in the world and, in doing so, would turn the European Union (EU) into a stronger pole in an increasingly multipolar world. In contrast, Sun Ru (1999) suggested that the impact of the euro would be limited in terms of reducing the primacy of the dollar and US unipolarity, and that the determining variable would be how far the Europeans could advance toward region-wide political union and a ‘common foreign and security policy’. Yu Jianhua (1999) suggested that the euro would help elevate the EU’s status, but the euro could not
replace the dollar; equally important for China, the EU and the US would remain close allies. Tang Yong (1999), in contrast, argued that the birth and advance of the euro would generate tensions in US-EU relations and the Americans would take measures to contain the euro, starting with intervening in former Yugoslavia. The survey of the leading journals also shows that there are two periods
when we see a punctuated rise in the number of articles on international money and finance: first, in 1998, at the time of the Asian financial crisis and the launch of the euro, and second, with the onset of the GFC in 2008. Interestingly, after the initial spike in 1998-99, the high tide of interest in finance and money was not sustained, as the number of articles dipped from eight in 1999 to two in 2000, and the numbers remained lower until 2005.6 Chinese IPE scholars did not follow their Western counterparts in paying more sustained research attention to the impact of the Asian financial crisis (such as Bowles, 2002; Pempel, 2005; Sohn, 2005). Two exceptions were Li Cong’s (2002)writing on the challenges for developing countries of operating within international financial and monetary systems that were created by the developed countries and skewed towards the interests of Northernmultinational firms andDing Yifan’s book (2002), Financial Game on the Balance Beam: From the Debt Crisis to Financial Crisis, which analysed the systemic shortcomings of unfettered financial capital flows as illuminated by the Asian financial crisis.7 Only with the articles of Li Xiangyang (2006) and then Zhang Yunling (2010) was there a return to Asian regional financial cooperation. Chinese IPE scholars also did not follow the example of Cohen (2003, 2008), Dyson (2006, 2008) or Johnson (2006), whose works gauged the actual outcomes in the euro area, the details of national adaptation to the euro, and the euro as an international currency option, following its initial launch. After the articles in World Economics and Politics in 1998 and 1999, it was not until 2011 that the same journal published another article on the euro and, once again, it was triggered by the onset of the current European debt crisis. Table 1 shows that 2005 again saw a sharp increase in the number of
publications on international money and global finance in the leading Chinese journals and the numbers continued to rise after 2005 (with 2006 being an aberration). From this point onwards, articles on money and finance far exceeded the number of articles on trade and foreign direct investment (FDI) and reached a crescendo in 2009. The numbers remained high through to 2012. The spike from 2005 onwards correlates, first, to the dramatic expansion of China’s foreign exchange reserve holdings after 2003-04 and growing US-China tension over the exchange rate; and, second, to the start of massive injections of international financing into the core of China’s banking sector as a result of a succession of initial public offerings by China’s four main state banks on Hong Kong’s financial markets.
