Locating state capitalism: Financial centres and the internationalisation of Chinese banks in London

Abstract

This paper examines the internationalisation of Chinese state-owned commercial banks in London's financial centre from the 2010s onwards. These banks have transformed from primarily servicing Chinese state-owned enterprises to making up four of the largest banks globally by balance sheet and undertaking a range of operations including RMB clearing and cross border settlement and yet their future international trajectory remains uncertain. My analysis positions Chinese bank internationalisation within the wider project of RMB internationalisation, arguing that financial centres can serve as important methodological, empirical and conceptual entry points into understanding how state and market interests play out unevenly across time and space. By focusing on place-based policy experimentation in London, my analysis points to the entangled, multi layered and often contradictory formations of actually existing state capitalism.

Making space for the new state capitalism, part II: Relationality, spatiotemporality and uneven development

“…Some of the socio-spatial relations that have been investigated – and will undoubtedly continue to yield fresh insights into the polymorphous geographies of contemporary state capitalism – include Sperber's (2022) complex relational geographies of social class undergirding state capitalism; political connections between state and business elites ( Wood et al, 2023 ); geopolitics ( Kinossian and Morgan, 2023 ; Ward et al, 2023 ); social relations of production and labor transformations ( Alami and Dixon, 2023 ); relations of empire ( Eagleton-Pierce, 2023 ; Silverwood and Berry, 2023 ; Whiteside, 2023 ); territorial relations at a range of scales ( Su and Lim, 2023 ); networks of production ( McGregor and Coe, 2023 ); corporate ownership ( Babić, 2023 ; Babic et al, 2020 ; Haberly and Wójcik, 2017 ); and finance ( Hall, 2023 ; Petry et al, 2023 ; Sokol, 2023 ). There is also considerable scope for further expanding the socio-spatial relations under consideration in state capitalism research, as some recent contributions have creatively shown (e.g.…”

Making space for the new state capitalism, part III: Thinking conjuncturally

“…What Meulbroek's contribution offers, ultimately, is a case for engaging with the complexity, contradictions, and (inter)connections among and inside the social-institutional formations that too often are taken to represent "statist" and "neoliberal" models tout court-a call with implications beyond state capitalism studies. Hall (2023), in her contribution focusing on the internationalization of Chinese state-owned banks in London, adopts a similar, spatially sensitive analytical frame. Like Meulbroek's strategic empirical choice to concentrate on the relations between the Chinese state and the World Bank, Hall's analytical strategy is apposite for unsettling binary or exceptionalist readings of state capitalism, while also moving beyond (or below) nation-state framings.…”

“…Hall (2023), in her contribution focusing on the internationalization of Chinese state-owned banks in London, adopts a similar, spatially sensitive analytical frame. Like Meulbroek's strategic empirical choice to concentrate on the relations between the Chinese state and the World Bank, Hall's analytical strategy is apposite for unsettling binary or exceptionalist readings of state capitalism, while also moving beyond (or below) nation-state framings.…”

“…London, as a premier international financial center, is conventionally positioned in the vanguard of liberal-market capitalism, and at the leading edge of a contemporary global conjuncture defined in large measure by the dominance of finance and financial actors. For Hall (2023: xx), the analytical value of examining an international financial center is it offers a “concrete conceptual and methodological entry point in revealing the tensions, contradictions and variegation inherent within state capitalist projects.” Hall relates how the largest state-owned commercial banks in China opened branches in London in 2014 and 2015. This was, in part, a function of renminbi internationalization and the role of these Chinese banks therein, but was also supported by other Chinese internationalization strategies, including Belt and Road and green finance initiatives.…”

The changing spatial arrangements of global finance: Financial, social and legal infrastructures

“…In this theme issue, we can see how both socio-material infrastructures and Mann-like infrastructural power are both at work. Hall's (2022) article examines how International Financial Centres like London shape the governance of financial networks and in so doing, facilitate broader geopolitical changes. The article examines how China's global ambitions in the new normal period have been advanced through the enrolment of London's financial infrastructure to internationalize the Renminbi.…”