'Capitalist Tools in Socialist Hands'? China Mobile in the Global Financial Network

Abstract

The paper analyses the evolution of China Mobile – one of China’s pioneer ‘national champions’, and one of the world’s largest telecom companies – through the lens of Global Financial Networks, an extension of the Global Production Networks approach, focusing on the role of advanced business services, world cities, and offshore jurisdictions in economic development. It demonstrates that despite being only a nascent Global Production Network, China Mobile is plugged firmly into the Global Financial Network, with incorporation in Hong Kong, cross-listing in Hong Kong and New York, and opaque offshore companies registered in the British Virgin Islands. Global advanced business services firms, with Goldman Sachs in the lead, have been instrumental in the very conception of China Mobile in 1997, and its subsequent expansion, thus helping the Chinese government consolidate and modernize the whole telecom sector. The case study highlights the position of Hong Kong as an onshore-offshore financial centre intermediating between global financial markets and Mainland China, and underwriting the reputation of China’s ‘national champions’. The analysis also points to the advantages of Beijing over Shanghai as a command centre of state owned and controlled enterprises, acting as a magnet for advanced business services. In political-economic terms, the articulation of China Mobile as a ‘national champion’ in the Global Financial Network sheds light on the limits of the Chinese model of centrally managed globalization and financialisation.