“Capitalist Tools in Socialist Hands”?

Abstract

Abstract This chapter analyzes 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 the global financial network framework, focusing on the role of financial and business services (FABS), financial centers, offshore jurisdictions, and various governments, in its development. It demonstrates that despite being a domestic company, China Mobile is plugged firmly into the global financial network, with incorporation in Hong Kong, cross-listing in Hong Kong and New York, and numerous offshore companies registered in the British Virgin Islands. Indeed, global FABS firms, with Goldman Sachs in the lead, were instrumental in the very conception of China Mobile in 1997 and its subsequent expansion, thus helping the Chinese government to consolidate and modernize its whole telecom sector. Hong Kong, meanwhile, has played a critical role as an onshore–offshore financial center intermediating between global financial markets and mainland China, and in underwriting the reputation of China’s “national champions.” The analysis also points to the advantages of Beijing over Shanghai as a financial center within the context of China’s state-dominated financial system. It also highlights the surprising parallels between China’s contemporary strategies of global financial engagement, and the strategies pursued by the USSR historically. Ultimately, it argues that China sits at a crossroads in its relationship with the global financial network, wherein it may end up turning the tables on the fundamentally postcolonial relationships that this network represents, even while becoming more deeply entangled in these relationships than ever.