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Selected Development Project
 
Project Title

Subnational Dynamics of International Financial Outreach: Local States and China’s Financial
中國金融開放的地方政治經濟基礎: 地方政府角色與國家政策走向
 
Principal Investigator Dr LI Yu Wai
 
Area of Research Project
Public Policy Research
 
Project Period
From 01/2015 To 06/2017
Objectives
  1. To conduct a comprehensive profiling of the financial opening initiatives of China’s local states
  2. To understand the different motivations of local authorities to initiate financial opening
  3. To analyze and evaluate the strategies pursued and employed by local authorities and their dynamics with financial interests and central bureaucratic actors in the policymaking process
  4. To refine existing theoretical knowledge on financial opening and provide informed policy recommendations for the financial development of Hong Kong
Methods Used
To achieve the objectives, this project adopts a qualitative approach centering on comparative case studies of China’s financial hubs, particularly Beijing, Shanghai, Shenzhen, and Tianjin. In-depth documentary review will be conducted covering official documents, research reports of think tanks affiliated with government agencies as well as secondary sources such as newspaper reports, financial publications, and in-house analyses of investment banks and brokerages. Following this, interviews with financial journalists, researchers, and local and central government officials would be arranged to tap their insights about subnational and inter-governmental dynamics in the course of China’s pursuit of financial opening.
Summary of Findings

As an ongoing project, there are two leading findings so far:
- Local authorities of leading financial hubs in China have been instrumental to shaping the financial opening agenda of the central authorities, especially for those that are expected to deliver substantial benefits to the local economy and promoting its competitiveness vis-a-vis other financial hubs.
- The extent to which the local agenda would be favourably received depends on several conditions, including supports from the financial industry on the local initiative, as well as the political patron in the centre that help promote the local clauses and deflect opposition from within.
Impact

Academically, the project contributes to the literature of international and comparative political economy with better understanding of the political economic foundations of financial opening. It also extends and potentially refines the insights of Chinese specialists into central-local relations and local authorities beyond their customary focus on intergovernmental fiscal relations.

In practical terms, the in-depth case studies of local experiences would lay the factual basis of providing informed policy recommendations for the financial development and regional/global positioning of Hong Kong as an international financial center.
Selected Output

Yu Wai Vic Li, Domestic Political Origins of China’s Financial Opening (book manuscript with contract from Routledge, forthcoming in 2018)
Yu Wai Vic Li, “Power Plays from the Fringe: East Asian Responses to Global Derivatives Reform,” in Eric Helleiner, Stefano Pagliari, Irene Spagna (eds.), Governing the World’s Biggest Market: The Politics of Derivatives Regulation After the 2008 Crisis (Oxford University Press, forthcoming in 2018).
Yu Wai Vic Li, “Re-stating or Rewriting the Global Finance Rulebook? China’s Financial Bureaucracy meets the Post-Crisis Regulatory Reforms,” The Hallsworth Conference on China and the Changing Global Order, the University of Manchester and Warwick, Mar 23rd-24th, 2017.
Yu Wai Vic Li, “Subnational Origin of China’s Financial Outreach: Local Authorities in Renminbi’s Regionalization,” Asian Dynamics Initiative Conference 2016, University of Copenhagen, Copenhagen, Denmark, Jun 20th-22nd, 2016.
Yu Wai Vic Li, “Subnational Dynamics of International Financial Outreach: Local States and China’s Financial Opening,” International Studies Association 57th Annual Convention, Atlanta, Mar 16-19th, 2016.
Hyoung-kyu Chey and Yu Wai Vic Li , “Bringing the Central Bank into the Study of Currency Internationalization: The People’s Bank of China and the Renminbi” International Studies Association 57th Annual Convention, Atlanta, Mar 16-19th, 2016.
Hyoung-kyu Chey and Yu Wai Vic Li “Bringing the Central Bank into the Study of Currency Internationalisation: Monetary Policy, Independence and Internationalisation,” with Hyoung-kyu Chey, GRIPS Discussion Paper 15-23, February 2016, Tokyo, http://id.nii.ac.jp/1295/00001330/.
Biography of Principal Investigator

Dr Li Yu Wai is the Assistant Professor in the Department of Social Sciences, Faculty of Liberal Arts and Social Sciences. Dr Li’s research interests include international political economy, with focus on political economy of finance and financial regulation and environmental politics of China.
Funding Source

Early Career Scheme