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Title: Mapping Chinese cross-border finance : actors, networks and institutional development
Author: Töpfer, Laura-Marie
ISNI:       0000 0004 6497 4672
Awarding Body: University of Oxford
Current Institution: University of Oxford
Date of Award: 2017
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This research project explores the rise of Chinese cross-border finance. Cross-border investment programmes have been at the heart of China's financial liberalisation. Yet, we know little about what drives the expansion of these new market entry channels and the effects they have on global finance. This thesis explores the role that formal and informal institutions play in China's financial system, by addressing three main research goals: (1) to rethink analytical frameworks of global financial networks, by shifting the focus to channels of state power; (2) to investigate how such formal institutions shape competitive hierarchies in financial markets, both inside and outside of China; (3) to demonstrate that informal institutions such as a common cultural identity are equally important to explain behaviour and outcomes in Chinese cross-border finance. The thesis pursues this agenda through four substantive papers, each with its own subset of research goals and findings. The papers follow a three-fold structure. The thesis begins with an analytical focus on agents (micro-level), by examining the evolution of state-firm relations in Chinese cross-border finance. The first paper develops a politically sensitive framework of global financial networks, which conceptualises how bargaining dynamics within China's party-state shape competitive hierarchies in Chinese capital markets. Drawing on these theoretical insights, the second paper breaks new empirical ground, by explaining the asymmetrical nature of market access criteria for foreign investors. The third paper zooms out on the global consequences that Chinese state control has for money centres (macro-level). It sheds light on how state-firm relations shaped London's development as the first Western offshore trading centre for Chinese currency. The fourth paper shifts the attention to the role of informal social institutions in Chinese equity markets. It presents the first empirical study of how a common cultural identity with Mainland China governs the behaviour of different investor categories (group-level). The thesis distils the following findings: Bargaining conflicts inside the Chinese party-state have a decisive impact on competitive outcomes and behaviour in Chinese cross-border finance, both domestically and globally. Strategic state interests form an interdependent relationship with the resources supplied by foreign investors and domestic corporate players. Domestically, these resource interdependencies explain the asymmetrical nature of market access under China's cross-border investment schemes. Globally, the shift in state-firm bargaining dynamics from strategic alignment to an increasing bifurcation of interests explains the patchy integration of RMB finance into London's financial architectures. Informal social institutions equally shape competitive outcomes in China's capital markets. Whilst the literature identifies shared cultural identity as a source of local information advantage, this thesis finds the opposite: A common cultural background with national Chinese investors reduces information asymmetries for foreign investors but it does not equate to local information advantages. Overall, the four substantive papers add up to a multifaceted yet integrated perspective on the drivers, dynamics and consequences of Chinese cross-border finance. They clarify that the intersection of formal state governance and informal social forces is essential for understanding how the spread of neoliberal market forces unfolds across Chinese capital markets. This thesis thus affirms that space and place remain central to our understanding of financial market outcomes.
Supervisor: Clark, Gordon Sponsor: Clarendon Fund ; Economic and Social Research Council ; Royal Geographical Society
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: International political economy ; China ; Economic geography ; Global Capital markets ; Chinese capital markets ; global finance ; state capitalism