Wall Street in China: the malleability of global finance in the age of geopolitics

In recent years, global financial firms have greatly expanded their business activities in China. This growing entanglement took place within the context of a liberal, US-dominated global financial order (GFO) whose norms and power constellations are largely facilitated by private financial actors. Historically, however, Chinese capital markets developed within the context of a state-capitalist economic system and significantly differed from global markets. Given these diverging ways of organizing finance, this paper investigates China’s relationship with the GFO amidst this increasing financial opening. Has China adopted liberal norms and accepted the contemporary order’s power constellations? Or has private finance accommodated China’s non-liberal norms with implications for US power? The paper first illustrates China’s resistance towards the GFO, rejecting its principles and maintaining state-capitalist principles. Moreover, it analyses the malleability of global finance as private financial actors’ China engagement increasingly compromises liberal norms and US power even amidst growing geopolitical tensions. While China does not actively seek to replace existing institutions, the global financial order is reconfigured as Wall Street accommodates China’s alternative model of market organisation. More broadly, the paper points towards a need for analysing other actors’ reactions towards China’s rise to understand its impact on global economic governance.