Hong Kong, London, and the Offshore RMB: China's Financial Transnationalization in Comparative Context

The Global Financial Crisis has catalysed transformation in the international monetary system, weakening confidence in the stability of the dollar-centred system and fuelling the internationalisation of China’s renminbi. The emerging political economy debate over the changing global financial order has, however, generally been pitched at a high level of empirical generality and theoretical abstraction. To address this deficiency this paper brings a concrete comparative institutional focus to the debate. Empirically, we explore the process of RMB internationalisation within two distinctive offshore financial centres, Hong Kong and London. We examine the purpose, form, extent, and intensity of RMB internationalisation in these two centres, examining patterns of continuity and divergence. Conceptually, we investigate whether the liberal dollar-centred pre-crisis financial order is being displaced by a singular emerging Chinese state-led order based upon an internationalising renminbi and an associated Chinese conception of finance and paradigm of global financial governance. Or whether we are witnessing the emergence of financial order/s in the plural, marked by spatially distinct and institutionally divergent practices of RMB internationalisation linked to differing regional imperatives and prevailing financial norms and practices. By developing empirically grounded theories of how financial orders evolve, coalesce, and diverge, we challenge the notion that the apparent dissolution of the prevailing global financial order will necessarily be replaced by an intellectually coherent alternative that is similarly global in scope and institutional design.