Description:
Scholars have focused on how the Belt and Road Initiative (BRI) facilitates Chinese economic statecraft and its likely impact on the global order. A common thread thereby is how connectivity through China’s construction of physical infrastructures (e.g. ports, roads, railways) represents a source of power. However, such a focus on physical infrastructures obscures the importance of BRI-related financial infrastructures. Addressing this gap, this article analyses the construction of Chinese financial infrastructures along the BRI as an exercise of economic statecraft within the context of the liberal, US-dominated global financial order. The article traces the activities of China’s state-owned exchanges as crucial actors that facilitate financial connectivity by enabling investment into BRI projects (investment opportunities), bringing Chinese investors into BRI markets (investors structure) and gradually shaping how these markets work (investment rules). First, I analyse three individual countries (Pakistan, Kazakhstan and Bangladesh) as examples of ‘bilateral’ and ‘offensive’ statecraft. Second, I analyse an emerging China-centred global network of financial infrastructures as exercise of ‘systemic’ and ‘defensive’ statecraft that shields China’s foreign policy objectives (i.e. BRI) from global pressures, potentially creating a parallel system of capital markets with Chinese characteristics. Beyond BRI, I therefore argue for including financial infrastructures more thoroughly into International Relations (IR)/International Political Economy (IPE) scholarship as important object of analysis.