Cross-Border Investment in China: Financial, Moral and Political Meanings of an Everyday Practice

This paper is based on research conducted through participant observation with a mergers and acquisitions (M&A) company conducting cross-border investment between China and Europe, based in Shanghai, and with interviews carried out with employees working in the financial industry in Shanghai, Beijing and Hong Kong. The paper concentrates on employees working for companies buying small and medium enterprises (SMEs) in China or in Europe, partly or wholly, in particular people working in Mergers and Acquisitions, Private Equity and Venture Capital. The analysis uses anthropological theories of money, power and globalization, in line with previous researches carried out by the author with stock brokers, hedge funds and fund managers in New York and Paris.

Based on three cases of cross-border investment, two leading to a transaction and another one in the process of finding funding for a company, the paper studies the negotiations of the meanings of the transaction for the parties, through the analysis of the negotiations of money amounts and contractual relations of power. The paper shows that the relations of power fluctuate in the negotiation, as do the identities of the parties and the financial techniques used to justify or make sense of the outcomes. It shows that the meanings of a financial transaction conducted by professionals are connected to the generation of profits, but also to moral and political imaginaries that are important in the fluid and often blurry definitions of the operation itself. Finally, it highlights the imaginaries of “China” as a source of funding and of profit for the actors observed, and shows the limited but fluctuating imaginaries of “global finance” that this implies.

Thus, the paper shows that the notions of “investor”, “market”, “state” and “identity”, whether “national”, “cultural” or “global”, are made sense of differently by each actor, in a context where they are redefined by financial practice and financial regulation. Thus, the paper contends that these categories cannot be used as analytic categories, but that we must understand them as complex, often fluid and ambiguous concepts with which financial employees make sense of their professional activity. This allows for understanding how these categories, with their multiple but limited meanings, are part of the legitimizing narratives of the particular allocation of monetary resources effected by financial professionals on a global scale.