On China’s growing geo-economic influence and the evolution of variegated capitalism

• Published in: Geoforum Vol. 41; no. 5; pp. 677 - 688
• Main Author: Lim, Kean Fan
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01.09.2010; New York, NY Pergamon Press
• Subjects: Asia; Bgi / Prodig; Capitalism; China; China Investment Corporation; Economic development; Economic geography; Economic power; Financial overaccumulation; Financial systems; Foreign exchange; Human geography; Internationalization; Macroeconomic constraints; State-owned enterprises (SOEs); Variegated capitalism; World economy; China; Macroeconomic constraints; China Investment Corporation; Financial overaccumulation; Variegated capitalism; State-owned enterprises (SOEs); China; Role of the State; Money; Economy; Market regulation; Globalization; Economic integration; Financial market; Capital accumulation; Capital; Sphere of influence; Capitalism
• ISSN: 0016-7185; 1872-9398
• DOI: 10.1016/j.geoforum.2010.04.003

China’s growing geo-economic clout globally has attracted significant research attention over the past few years. Rather than strictly adopt a national-specific and path-dependent perspective, this paper offers a nuanced perspective on the rationale of Chinese economic expansions overseas. I propose we view China’s growing geo-economic influence as a relational development, inextricably connected to broader changes in global capitalism, especially the failure of the US government to maintain confidence in the dollar. The paper probes critically the underlying logics of two recent developments: (1) the role of the China Investment Corporation (a new sovereign wealth fund) and state-owned enterprises (SOEs) in accessing new markets worldwide; and (2) the policies to extend the global reach of the Chinese yuan. I argue that these phenomena are concatenated to China’s broader aim to secure domestic economic security, given its vast holdings of dollar reserves and its macroeconomic constraints through the maintenance of a fixed foreign exchange regime. These developments in turn contour and sustain the evolution of the variegated global system of capitalism.