Leveraging Money and Politics: the Rise of China’s Sovereign ‘Leveraged’ Funds and China’s Financial Statecraft

Start date: Friday, 12 February, 14:00
End date: Friday, 12 February, 15:00
Venue: Online

International Relations of China Seminar

To register for this event (via Microsoft Teams), please email information@chinese.ox.ac.uk

Both China and Japan are the world’s two largest foreign exchange reserves holders, but why has China used its foreign exchange reserves to establish not only one but several sovereign wealth funds, whereas Japan has refused to do so? Moreover, the world’s leading sovereign wealth funds are mostly established in commodity-exporting countries for stabilization or savings purposes, what does China, a major commodity importer, establish and use its sovereign wealth funds for? With the global expansion of China’s sovereign funds since the Global Financial Crisis, what are the implications for the role of the Chinese state in the global financial system? By systematically analysing the evolution of China’s sovereign funds complex, this talk answers these questions and illustrates how the Chinese state has leveraged both political and financial resources to establish a global network of Chinese sovereign ‘leveraged’ funds and advance state-prioritized agenda at home and abroad. It discusses the economic and financial rational for China’s use of foreign exchange reserves to capitalize several state-owned investment funds owned by different government agencies. It also adopts ‘following the money’ approach and analyses the politics of these funds as Alexander Gerschenkron’s capital mobilizers in the international markets and agents of financial statecraft.

Dr Zongyuan Zoe Liu is an Instructional Assistant Professor at Texas A&M’s Bush School of Government and Public Service in Washington, DC. She received her PhD from the Paul H. Nitze School of Advanced International Studies (SAIS), Johns Hopkins University. Dr Liu also holds research positions at the Center for International Environment and Resource Policy at the Fletcher School Tufts University, SovereigNet at the Institute for Business in the Global Context at the Fletcher School, and the Edwin O. Reischauer Center for East Asian Studies. Her research interests include International Political Economy, Comparative Politics, and International Finance, with area expertise in East Asia.

Dr Liu received her MA in International Relations from the George Washington University, the Elliott School of International Studies. She did her undergraduate in China and holds a BA in History. Dr Liu is a native speaker of Chinese mandarin and she reads Japanese as well. She took the Chartered Financial Analyst (CFA) Level 3 exam in December 2020.

Dr Liu is currently working on two book projects. The first project is on the political economy of government-owned investment institutions and financial statecraft. The second project examines financial collaboration among emerging market countries in the changing international monetary and financial system, with a particular focus on the de-dollarization activities of BRICS countries. This project will be published by Cambridge University Press in 2021.