Wenting He, A/Prof Amy King, Priyanka Sunder, Bo Li1
1Australian National University, Canberra, Australia
Biography:
Wenting He is completing her PhD in International Relations at the Australian National University. Her PhD project examines how China’s financial policy interests have been shaped by state-wide discursive contestation over financial market development in response to major economic crises, spanning the late-1980s inflation, the Asian Financial Crisis, the Global Financial Crisis, and the 2015 stock market crash. Her research is on economic crisis, economic statecraft, non-traditional security, and the role of discourse in policymaking, with a focus on China, Australia, and the United States.
Abstract:
While remaining the world’s largest sovereign source of infrastructure finance, China’s approach to infrastructure financing has evolved considerably over the past decade. Initially focused on the rapid disbursement of commercially priced loans, China has begun selectively engaging with some key multilateral environmental, social and debt sustainability norms. Recent interventions in the literature have explained this shift through cost-benefit analysis of Chinese policy banks and political-economy interactions between China and recipient countries. This paper identifies a third, ideational explanation. Emphasising the rhetorical sources of state interests, we conceptualise the shift in state interests as a social, interactive process involving domestic and international actors who strategically communicate their ideas. Through this lens, we demonstrate how China’s shifting infrastructure financing interests have been shaped by the discursive interplay between cognitive and principled ideas held by domestic stakeholders, other states, and multilateral development banks (MDBs). This discursive interplay has led China to adjust its interpretation of the post-WWII infrastructure financing order and to re-evaluate its role as a sovereign lender within this order. In this light, while China has become increasingly mindful of loan defaults and reputational risks, and has selectively engaged with some environmental, social and debt sustainability norms, China’s receptivity to developing country discourse has also shaped its resistance to wholesale adoption of MDB norms.