Holism Failure: China’s Inconsistent Stances and Consistent Interests in Global Financial Governance

Abstract

A holism tendency in International Relations (IR) studies treats international systems and states as unitary wholes and thus leads to a tripartite view on China’s international role as either a revisionist, status quo or a pragmatist power. China’s stances in global financial governance (GFG), however, are inconsistent, which indicates that China is not a pure challenger or status quo power. These inconsistent stances do not allude to China being a pragmatist power, which makes policies and takes actions in a practical and matter-of-fact way without consistent national interests. Instead, China has inconsistent stances but consistent core national interests. The ostensible contradiction is due to the explanatory deficiency of the IR holistic tendency, which pays inadequate attention to fragmentations of international and domestic systems.

Acknowledgement

Sincere gratitude to Professors Tony Porter, Robert O’Brien and Wang Zhengyi for their inspirational suggestions and to the reviewers for their valuable and insightful comments.

Notes

¹ Denny Roy, ‘The “China Threat” Issue: Major Arguments’, Asian Survey 36(8), (1996), pp. 758–771.

² See for example, John Mearsheimer, The Tragedy of Great Power Politics (New York: W. W. Norton, 2001); John Mearsheimer, ‘China’s unpeaceful rise’, Current History, April, (2006), pp. 160–162; Aaron Friedberg, A Contest for Supremacy: China, America, and the Struggle for Mastery in Asia (New York: Norton, 2012); Yves-Heng Lim, ‘How (dis)satisfied is China? A power transition theory perspective’, Journal of Contemporary China 24(92), (2015), pp. 280–297; Ronald Tammen and Jacek Kugler, ‘Power transition and China–US conflicts’, Chinese Journal of International Politics 1(1), (2006), pp. 35–55

³ John Mearsheimer, The Tragedy of Great Power Politics.

⁴ Yves-Heng Lim, ‘How (dis)satisfied is China? A power transition theory perspective’.

⁵ See for example, Alastair I. Johnston, ‘Is China a status quo power?’, International Security 27(4), (2003), pp. 5–56; Samuel Kim, ‘China in world politics’, in Barry Buzan and Rosemary Foot, eds. Does China Matter? A Reassessment (London: Routledge, 2004), pp. 37–54; Susan Shirk, China Fragile Superpower (New York: Oxford University Press, 2008).

⁶ Robert O. Keohane and Joseph S. Nye, Power and Interdependence (Boston, MA: Scott, Foresman and Company, 1989).

⁷ Injoo Sohn, ‘Between confrontation and assimilation: China and the fragmentation of global financial governance’, Journal of Contemporary China 22(82), (2013), pp. 630–648.

⁸ Xiao Ren, ‘A reform-minded status quo power? China, the G20, and reform of the international financial system’, Third World Quarterly 36(11), (2015), pp. 2023-2043.

⁹ Falin Zhang, ‘China and global financial governance: centripetalism, elevation and disparity’, International Journal of Area Studies 8(1), (2013), pp. 90–113.

¹⁰ Falin Zhang, ‘Stocktaking international financial governance reforms in the post-crisis era: a safer global financial world?’, in Handbook of Research on Globalization and the International Political Economy, IGI Global (2016, forthcoming).

¹¹ Klaus Dingwerth and Philipp Pattberg, ‘Global governance as a perspective on world politics’, Global Governance 12(2), (2006), p. 185; James A. Yunker, ‘Effective global governance without effective global government: a contemporary myth’, World Futures 60, (2004), p. 504.

¹² Klaus Dingwerth and Philipp Pattberg, ‘Global governance as a perspective on world politics’, p. 185.

¹³ Lawrence S. Finkelstein, ‘What is global governance?’, Global Governance 1, (1995) , p. 368.

¹⁴ James A. Yunker, ‘Effective global governance without effective global government: a contemporary myth’, p. 504.

¹⁵ Klaus Dingwerth and Philipp Pattberg, ‘Global governance as a perspective on world politics’, p. 188.

¹⁶ William Walters, ‘Some critical notes on “governance”,’ Studies in Political Economy 73, (2004), p. 28.

¹⁷ James W. Davis, ‘A critical view of global governance’, Swiss Political Science Review 18(2), (2012), p. 273.

¹⁸ James A. Yunker, ‘Effective global governance without effective global government: a contemporary myth’, p. 503.

¹⁹ CGG,Our Global Neighborhood (Oxford: Oxford University Press,1995), p. 2.

²⁰ Henk Overbeek, ‘Global governance, class, hegemony: a historical materialist perspective’, in Alice D. Ba and Matthew J. Hoffmann, eds. Contending Perspectives on Global Governance: Coherence, Contestation, and World Order (London and New York: Routledge, 2005), pp. 39–56.

²¹ Lawrence S. Finkelstein, ‘What is global governance?’, Global Governance 1, (1995), p. 369.

²² Samuel M. Makinda, ‘International society and global governance’, SAGE Publication 36(3), (2001), pp. 334–337; Robert O'Brien et al., Contesting Global Governance: Multilateral Economic Institutions and Global Social Movements (Cambridge: Cambridge University Press, 2000).

²³ Klaus Dingwerth and Philipp Pattberg, ‘Global governance as a perspective on world politics’, pp. 185–203.

²⁴ Ibid, p.189.

²⁵ James N. Rosenau, ‘Governance in the twenty-first century’, Global Governance 1(1), (1995), p. 13.

²⁶ Klaus Dingwerth and Philipp Pattberg, ‘Global governance as a perspective on world politics’, p. 193.

²⁷ Frank Biermann et al., ‘The fragmentation of global governance architectures: a framework for analysis’, Global Environmental Politics 9(4), (2009), pp. 14–40.

²⁸ Ibid, p. 15.

²⁹ Dieter Senghaas, ‘Global governance: how could it be conceived?’, Security Dialogue 24(3), (1993), pp. 247–256.

³⁰ Jim Whitman, ‘Global dynamics and the limits of global governance’, Global Society 17(3), (2003), pp. 253–272.

³¹ Henk Overbeek, ‘Global Governance, Class, Hegemony: A Historical Materialist Perspectives’, p. 39.

³² Jim Whitman, ‘Global dynamics and the limits of global governance’, p. 254.

³³ William Walters, ‘Some critical notes on “governance”’, Studies in Political Economy 73, (2004), pp. 27–46.

³⁴ Gerry Stoker, ‘Governance as theory: five propositions’, International Social Science Journal 50(155), (1998), pp. 187–195.

³⁵ Ibid.

³⁶ ‘Chinese President Calls for Concerted Efforts to Tide over Financial Crisis’, Xinhua News, November 16, 2008, http://news.xinhuanet.com/english/2008-11/16/content_10364284.htm, accessed on November 20, 2015.

³⁷ The PBC, ‘2015 nian renminbi guojihua baogao’ [‘Renminbi Internationalization Report 2015’], Beijing: People’s Bank of China, 2015, p. 2.

³⁸ Geoffrey Garrett, ‘The G2 in the G-20: China, the United States and the World after the Global Financial Crisis’, Global Policy 1(1), (2010), pp. 29–39.

³⁹ Falin Zhang, ‘Determinants and fluctuations of China’s exchange rate policy’, in J. Jay Choi, Michaelk R.Powers and Xiaotian T. Zhang, eds. International Finance Review Vol. 17: The Political Economy of Chinese Finance (Bradford, US: Emerald, 2016), pp. 343–369.

⁴⁰ IMF, 2009 Article IV Consultation with the People's Republic of China. Public Information Notice (PIN) No. 09/87 (2009).

⁴¹ Alan Beattie, ‘IMF in discord over Renminbi’, Financial Times (January 26, 2009), available at: https://www.ft.com/content/b876fafc-eb18-11dd-bb6e-0000779fd2ac (accessed 21 November 2015).

⁴² IMF, 2012 Article IV Consultation with the People's Republic of China, Public Information Notice (PIN) No. 12/195 (2012).

⁴³ Haowen Lv, ‘G8 yu Zhongguo de jige xuannian’ [‘Several puzzles: G8 and China’],Zhongguo jianyan jianyi [China Inspection and Quarantine] 9, (2006), pp. 4–7.

⁴⁴ Gregory T. Chin, ‘China’s evolving G8 engagement complex: interests and multiple identity in global governance reform’, in Andrew F. Cooper and Agata Antkiewicz, eds., Emerging Powers in Global Governance-Lessons from the Heiligendamm Process (Canada: Wilfrid Laurier University Press, 2008), pp. 83–114.

⁴⁵ Yu Yongding, ‘The G20 and China: a Chinese perspective’, China and World Economy 13(1), (2005), p. 9.

⁴⁶ Wei Huang, ‘Global governance under the G20: a Chinese perspective’, in Wilhelm Hofmeister and Susanna Vogt, eds., G20 – Perceptions and Perspectives for Global Governance (Singapore: Konrad-Adenauer-Stiftung, 2011), pp. 41–50.

⁴⁷ Ibid.

⁴⁸ Yu Yongding, China’s ‘Twin Surpluses’: Causes and Remedies, EAI Background Brief No. 283, (2006), p. 12.

⁴⁹ Jeffrey Frankel, No Single Currency Regime is Right for all Countries or at all Times, NBER Working Papers, No.7338, (1999); George Michalopoulos, ‘The internationalization of the euro: trend, challenges and risks’, in Volbert Alexander and Hans-Helmut Kotz, eds., Global Divergence in Trade, Money and Policy (Cheltenham, UK and Northampton, US: Edward Elgar Publishing, 2006), pp. 175–214; Haihong Gao and Yu Yongding, ‘Renminbi guojihua de hanyi he tiaojian’ [‘Implications and Conditions of RMB Internationalization’], Guoji jingji pinglun [International Economic Review] 1, (2010), pp. 46–64.

⁵⁰ Arthur Kroeber, China’s Global Currency: Lever for Financial Reform, Brookings-Tsinghua Center for Public Policy, Monograph Series Number 3, (2013).

⁵¹ Dominick Salvatore, ‘The future tri-polar international monetary system’, Journal of Policy Modeling 33, (2011), p. 807.

⁵² Paul Krugman, ‘China’s dollar trap’, New York Times (3 April 2009), available at: http://www.nytimes.com/2009/04/03/opinion/03krugman.html?_r=0 (accessed 25 November 2015)

⁵³ Tong Cao, ‘Zhongguo ruhe yingduimeiguo huobizhan’ [‘How should China deal with the US currency war?’], Jingji guancha [Economic Observation] (15 October 2010) available at: http://www.eeo.com.cn/observer/shelun/2010/10/14/182712_7.shtml (accessed 25 November 2015).

⁵⁴ Jianhong Zhu, ‘Jinrong weiji gei zhongguo dailai le naxie jihui’ [‘What opportunities the financial crisis has brought to China’], Renmin ribao [People’s Daily (5 February 2009), available at: http://finance.people.com.cn/GB/8752663.html (accessed 26 November 2015).

⁵⁵ Falin Zhang, ‘China and global financial governance: centripetalism, elevation and disparity’.

⁵⁶ Falin Zhang, ‘Determinants and fluctuations of China’s exchange rate policy’.

⁵⁷ ‘Renmin yinhang hangzhang Zhou Xiaochuan jiu huilv xingchengjizhi gaige da jizhewen’ [‘Governor of People’s Bank of China Meets Press’], Xinhua News (11 September 2005), available at: http://www.gov.cn/jrzg/2005-09/11/content_30807.htm (accessed 26 November 2015).

⁵⁸ ‘Zhongguoban ‘ba III’ zhutui jiegui guoji’ [Chinese Version of Basel III Accelerates Internationalization of Chinese Banks], Xinhua News (13 October 2013), available at: http://news.xinhuanet.com/fortune/2013-10/13/c_117694775.htm (accessed 27 November 2015).

⁵⁹ Hedley Bull, The Anarchical Society: A Study of Order in World Politics (London: Macmillan, 1977).

⁶⁰ John Gerard Ruggie, ‘International regimes, transactions and change: Embedded Liberalism in the Postwar Economic Order’, in Stephen D. Krasner, ed., International Regimes (Ithaca, NY: Cornell University Press, 1983), pp. 195–232.

⁶¹ Christian List and Kai Spiekermann, ‘Methodological individualism and holism in political science: a reconciliation’, American Political Science Review 107(4), (2013), pp. 629–643.

⁶² Eric Helleiner and Tony Porter, ‘Making transnational networks more accountable’, in Sara Burke, ed., Re-Defining the Global Economy, (New York: Friedrich Ebert Stiftung Occasional paper #42, 2009), pp. 14–24; Falin Zhang, ‘China and global financial governance: centripetalism, elevation and disparity’.

⁶³ Andrew Sheng, ‘Financial crisis and global governance: a network analysis’, Commission on Growth and Development Working Paper No. 67, (2010).

⁶⁴ See Note 55.

⁶⁵ Ibid, p. 96.

⁶⁶ Kenneth N. Waltz, Theory of International Politics (Reading, MA: Addison-Wesley, 1979).

⁶⁷ Stefan A. Schirm, ‘Ideas and interests in global financial governance: comparing German and US preference formation’, Cambridge Review of International Affairs 22(3), (2009), p. 501.

⁶⁸ Thomas G. Weiss and Rorden Wilkinson, ‘Rethinking global governance? Complexity, authority, power, change’, International Studies Quarterly 58, (2014), pp. 207–215.

⁶⁹ James N. Rosenau, ‘Toward an ontology for global governance’, in Martin Hewson and Timothy J. Sinclair, eds., Approaches to Global Governance Theory, (New York: State University of New York Press, 1999), pp. 287–301.

⁷⁰ Frank Biermann et al., ‘The fragmentation of global governance architectures: a framework for analysis’, Global Environmental Politics 9(4), (2009), pp. 14–40.

⁷¹ Ibid.

⁷² See Note 55.

⁷³ Injoo Sohn, ‘Between confrontation and assimilation: China and the fragmentation of global financial governance’.

⁷⁴ Peter Knaack, ‘Innovation and deadlock in global financial governance: transatlantic coordination failure in OTC derivatives regulation’, Review of International Political Economy 22(6), (2015), pp.1217–1248.

⁷⁵ Valerie M. Hudson, ‘Foreign policy analysis: actor-specific theory and the ground of international relations’, Foreign Policy Analysis 1, (2005), pp. 1–30.

⁷⁶ See Note 56.

⁷⁷ For detailed analysis, see Falin Zhang, ‘Determinants and fluctuations of China’s exchange rate policy’.