The evolution, nature and extent of China’s financial power in East Asian financial regionalism

This paper starts from the observation that the theoretical and empirical literature on economic statecraft focusing on direct, relational and instrumental power from a security perspective is not well suited to understand the People's Republic of China's rise as a regional financial power in East Asia. This phenomenon rather has to be understood as the result of gradual changes in the balance of two forms of structural power: 1) Shifting asymmetries of capital flows aggregating as centrality and status in the regional system together with 2) increasingly successful Chinese efforts in the field of competitive regional financial governance and the provision of the public good "financial security". I argue that through its influence on government- and central bank-directed capital flows to deal with financial threats in East Asia, the People’s Republic of China has achieved a considerable degree of structural power in the region with spill-over effects into other fields of regional and global politics. On a theoretical level, this paper contributes to the renewed debates revolving around structural power in international relations by highlighting three aspects: 1) the eminent importance of structural power struggle in the field of international finance 2) the regional and evolutionary dimension of structural power, and finally 3) the value of focusing on leadership in the setting up of institutional governance, on indirect institutional effects and on impersonal structural bias (centrality, role-attribution, status) to analyze structural power. Empirically, I illustrated my conceptual considerations by tracing Chinese influence in the establishment of arrangements in the field of defensive financial regionalism and related state practice from the Japanese Asian Monetary Fund proposal in 1998 to the Chiang-Mai Initiative Multilateralization in 2009.