Asia, Finance and the Liberal Script: Between Accommodation, Co-Existence and Contestation

This chapter investigates the growing importance of Asia within the global financial system and analyzes its implications for the liberal script. First, the chapter explores the place of finance within the liberal script, investigating the paradigm shift from embedded liberalism to neoliberalism and subsequently growing importance of capital-market based finance for economic allocation within the Western script. Second, the autonomous origins of developmentalism in Asian financial scripts are discussed which markedly differ from (neo)liberal conceptions of finance. Third, and moving beyond the neoliberal-developmental dichotomy, the chapter conducts a comparative analysis of the five largest Asian financial systems: China, Korea, India, Japan, and Singapore. In doing so, the chapter identifies significant variations of how Asian finance relates to the liberal script, ranging between accommodation, resistance, and contestation. While maintaining some developmental characteristics, Japan and Singapore largely accommodate the liberal script. In contrast, we can observe resistance to conform with the liberal script in Korea and India where developmental characteristics maintain a prominent role and steps are taken to enable a controlled co-existence. Finally, only China truly contests the liberal script, both through the intensity and international reach of its developmental characteristics but most importantly through other actors’ reaction towards it. The chapter thus illustrates that while there are significant differences between (more) developmental Asian and (more) neoliberal Western financial systems, the rise of Asia represents only a partial contestation of the neoliberal financial script, which cannot, however, be separated from broader geopolitical constellations that challenge the liberal script.