The Spatial Dimension of the ‘New’ Chinese State Capitalism: Exploring RMB Transnationalization in Luxembourg and Its Implications for Monetary Autonomy

ABSTRACT

The concept of ‘new’ state capitalism has garnered increasing attention among scholars due to the emergence of a polymorphism of state interventions in recent years. These interventions are now being examined through a spatial lens, departing from the previously dominant methodological nationalism. In this case, the ‘new’ Chinese state capitalism is particularly noteworthy. The People’s Republic of China (PRC) has adopted a spatial state-led strategy to facilitate the Renminbi (RMB) transnationalization. This strategic approach transcends traditional national boundaries, stretching across different spaces. Our research focuses on the specific case of Luxembourg in relation to this spatial strategy. We assert that the RMB transnationalization represents a distinctive feature of the ‘new’ Chinese state capitalism, as it is underpinned by explicit Chinese state policies, unlike other currencies whose global use was the result of growing economies. Moreover, we contend that the PRC’s explicit policies regarding the RMB do not aim for full convertibility and widespread acceptance like the US-Dollar (USD). Instead, they prioritise its role as a trade currency for international trade settlements, as the main goal is to reduce the dependence on the USD and to create a stable International Monetary System (IMS) that will bring benefits to its trade-oriented economic model. Overall, this paper significantly contributes to the existing literature by offering a novel perspective on the RMB transnationalization within the framework of the ‘new’ Chinese state capitalism, emphasising China’s quest for autonomy from the USD.

Disclosure Statement

No potential conflict of interest was reported by the author(s).