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International financial regulation and domestic coalitions in state-permeated capitalism: China and global banking rules

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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.

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Notes

  1. 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.

  2. 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).

  3. I owe this point to a comment by Andrew Walter.

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  1. Goethe-Universität Frankfurt, Institut für Politikwissenschaft, Campus Westend – PEG Fachbereich 03, Hauspostfach 20, Grüneburgplatz 1, Frankfurt, 60323, Germany

    Andreas Nölke

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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

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