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China’s capital controls: Between contender state and integration into the heartland

Abstract

This article examines the foundations and evolution of China’s capital controls. It is argued that the continuation of stringent controls in the reality of worldwide liberalisation is the result of the hegemony of a historic bloc, comprising foreign industrial capital, Chinese state-owned industrial and banking capital, and a fraction of the state class that wants to keep control over China’s economy. However, despite the still extensive controls, significant capital account liberalisation has been carried out. The origins can be found in the strategy of a fraction of the state class which wants to transform China’s accumulation regime in order to form a challenge to US power. Support for this strategy is provided by Chinese technocrats, Chinese wealthy individuals and foreign financial capital. At the moment, it seems that these pro-liberalisation social forces are gaining the upper hand. This could ultimately lead to China’s full integration into the Western heartland.

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Dierckx, S. China’s capital controls: Between contender state and integration into the heartland. Int Polit 52, 724–742 (2015). https://doi.org/10.1057/ip.2015.16

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Keywords

  • China
  • capital controls
  • liberalisation
  • heartland
  • contender state