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Financialisation of developing and emerging economies and China’s experience: how China resists financialisation

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  • Fusheng Xie
  • Xiaolu Kuang
  • Zhi Li

Abstract

In this paper, we discuss the process of financialisation of developing countries and emerging economies (DEEs) from the perspective of critical realism (CR). We argue that the emergence of financialisation depends on the inherent tendency of the imbalance between the accumulation of productive and financial capital being actualised, and emphasise how government’s intentional actions under current social structures relate to this process. We use China as a case study to illustrate how DEEs can resist financialisation and maintain productive accumulation during development. We elaborate on various institutional and policy adjustments undertaken by China during different phases that promoted productive accumulation and how China avoided financialisation for much of its growth period. Our discussion helps to explain why China’s limited financialisation compared to other DEEs who experienced financialisation featured by dependency. We conclude by highlighting new potential risks and sources of financialisation faced by the Chinese economy.

Suggested Citation

  • Fusheng Xie & Xiaolu Kuang & Zhi Li, 2022. "Financialisation of developing and emerging economies and China’s experience: how China resists financialisation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 46(5), pages 1183-1204.
    • Handle: RePEc:oup:cambje:v:46:y:2022:i:5:p:1183-1204.
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    File URL: http://hdl.handle.net/10.1093/cje/beac037
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    Cited by:

    1. Joel Rabinovich & Niall Reddy, 2024. "Corporate Financialization: A Conceptual Clarification and Critical Review of the Literature," Working Papers PKWP2402, Post Keynesian Economics Society (PKES).
    2. Vedit Ä°nal, 2024. "On the Relationship between the Money Rate of Interest and Aggregate Investment Spending," Review of Radical Political Economics, Union for Radical Political Economics, vol. 56(2), pages 300-318, June.

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