Power transitions and global trade governance: The impact of a rising China on the export credit regime

Hopewell, Kristen

doi:10.1111/rego.12253

Cited by 26 publications

(18 citation statements)

References 36 publications

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“…Accommodation turns the former rule-takers with divergent preferences into rule-makers and transforms the existing regime in the process, as seen in the analyses of the health-related intellectual property rights regime (Serrano & Burri 2021) and the rules governing labor mobility (Lavenex & Jurje 2021). We also find, however, that accommodating large emerging economies is difficult and may be impossible if there is no cooperative solution that all sides see as preferable to maintaining separate, conflicting rules as in the case of the international rules governing export credit (Hopewell 2021). Moreover, as shown by Evenett (2021), emergent economies are not alone in undermining, through noncompliance, the regulatory regimes that make up the international order.…”

Section: Discussionmentioning

confidence: 82%

Power transitions and the rise of the regulatory state: Global market governance in flux

Lavenex

Serrano

Büthe

2021

Regulation & Governance

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This special issue examines the consequences of the ongoing power transition in the world economy for global regulatory regimes, especially the variation in rising powers' transition from rule-takers to rule-makers in global markets. This introductory article presents the analytical framework for better understanding those consequences, the Power Transition Theory of Global Economic Governance (PTT-GEG), which extends the scope of traditional power transition theory to conflict and cooperation in the international political economy and global regulatory governance. PTT-GEG emphasizes variation in the institutional strength of the regulatory state as the key conduit through which the growing market size of the emergent economies gives their governments leverage in global regulatory regimes. Whether or not a particular rising power, for a particular regulatory issue, invests its resources in building a strong regulatory state, however, is a political choice, requiring an analysis of the interplay of domestic and international politics that fuels or inhibits the creation of regulatory capacity and capability. PTT-GEG further emphasizes variation in the extent to which rising powers' substantive, policy-specific preferences diverge from the established powers' preferences as enshrined in the regulatory status quo. Divergence should not be assumed as given. Distinct combinations of these two variables yield, for each regulatory regime, distinct theoretical expectations about how the power transition in the world economy will affect global economic governance, helping us identify the conditions under which rule-takers will become regime-transforming rule-makers, regime-undermining rule-breakers, resentful rule-fakers, or regime-strengthening rule-promoters, as well as the conditions under which they remain weakly regime-supporting rule-takers.

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Section: Discussionmentioning

confidence: 82%

Power transitions and the rise of the regulatory state: Global market governance in flux

Lavenex

Serrano

Büthe

2021

Regulation & Governance

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“…One way to interpret China's rise as well as its interaction with the existing international orders is through the lens of late development. Emerging economies employed statebacked credits to facilitate growth, thereby challenging the liberal international order that mainly reflects the preferences of early-developed industrial economies and restrains excessive state intervention in economic activities (Hopewell, 2019;Nölke et al, 2015). China was far from the first country to practice "state-led" overseas infrastructure financing in an "illiberal" manner.…”

Section: China's Late Development: Generality and Peculiaritymentioning

confidence: 99%

“…China's overseas infrastructure finance falls under the domain of international development (Chin and Quadir, 2013;Mawdsley, 2012) and international trade (Hopewell, 2019;Liao, 2021). The reason that it encompasses two domains, as the sections below elaborate further, is associated with the dual nature of the Chinese credits: they fulfill state objectives while at the same time pursuing commercial interests.…”

Section: A Dichotomy: the Current International Credit Governance And The Role Of Public Financial Agenciesmentioning

confidence: 99%

Infrastructure finance, late development, and China’s reshaping of international credit governance

Chen

2021

European Journal of International Relations

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How is the rise of China affecting international governance? This paper examines the domain of infrastructure finance by focusing on China’s two policy banks, which are the main creditors of China’s overseas infrastructure projects. While the incumbent international credit regimes led by the Organisation for Economic Co-operation and Development (OECD) distinguish development-oriented aid from commercially oriented export credits, emerging late-developed economies blur this dichotomy by largely funding development projects with state-backed export credits. The way China alters the OECD’s credit governance, this paper argues, demonstrates both the generality of late development and the peculiarity of “Chinese” development. Rather than directly subsidizing firms’ international business with the state’s fiscal revenue, policy banks financialized host country’s state-owned and state-coordinated assets using various market instruments. By doing so, they gave Chinese firms a comparative advantage in the markets of less developed regions, allowing them to undertake projects that firms from advanced industrial countries cannot. This financing mechanism has reshaped the international development regime by transforming the dominant means of credit allocation from state-led aid-giving to market-based exchange, and rewritten the liberal rules of the international export credit regime by financing the developing world in a both statist and liberalist manner. As a result, China has built a paralleled regime in regions insufficiently covered by the existing financial schemes of incumbent credit regimes.

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“…The outside option in the case of export credit is especially desirable for China, Bunte et al (2018) argue, as its non‐OECD status allows Beijing to maintain autonomy in its bilateral public financial policy. Hopewell (2019a) further explains the significance of this autonomy, stressing that ECAs, unlike development agencies, have mandates to promote exports and are of particular importance to China’s state‐led development model in which over‐subsidization is less of a concern. Studies (Holslag, 2008; Liao, 2019; Luo et al, 2010) confirm the observation that as part of China’s industrial policy, ECAs rose to support Beijing’s decade‐long ‘Go Out’ export promotion campaign.…”

Section: Export Finance Oecd Eca Regime and A Rising Chinamentioning

confidence: 99%

The Club‐based Climate Regime and OECD Negotiations on Restricting Coal‐fired Power Export Finance

Liao

2020

Global Policy

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This article examines the origin, process, and outcome of an understudied, but important multilateral climate change negotiation: the OECD negotiation to restrict export finance for coal‐fired power projects. It assesses how the United States – the OECD’s most powerful member – led the negotiations, and how Japan, South Korea, and China – a non‐OECD state – affected the negotiation’s outcome. It shows how internal and external dynamics of the negotiation under the shadow of China’s rising market influence shaped the preferences of Japan and South Korea in such a way that constrained US attempts to build new rules in curbing coal export finance. This research illustrates the collective action problem in an increasingly fragmented global governance landscape driven by transitions in global power. Contrary to critics that have identified China’s participation in multilateral organizations as weakening the global liberal order, this research shows that a ‘club‐based’ approach to this liberal order proved ineffective absent China’s participation.

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Power transitions and global trade governance: The impact of a rising China on the export credit regime

Cited by 26 publications

References 36 publications

Power transitions and the rise of the regulatory state: Global market governance in flux

Power transitions and the rise of the regulatory state: Global market governance in flux

Infrastructure finance, late development, and China’s reshaping of international credit governance

The Club‐based Climate Regime and OECD Negotiations on Restricting Coal‐fired Power Export Finance

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