| 22.11.2023

Political and Geopolitical Shifts spearhead China's financial surge

Stadslandskap i horisonten med solljus bakom molnen
China's corporate finance landscape is undergoing a transformation, shaped by the subtle yet powerful forces of political connections and geopolitical tension. The Chinese currency, the Renminbi, is also becoming a pivotal player in the global economic system, amidst the country's market liberalisation and expansion.

In her dissertation, Lidan Zhang "Exploring the Financial Landscape of China: Political Connections, Geopolitical Uncertainty, and Renminbi Internationalization," Lidan Zhang explores the significant influence of political connections and the strategic implications of geopolitical uncertainties on corporate financial practices in China.

Political alliances are increasingly important in corporate financing and investment decisions, challenging the traditional view of market independence. According to Zhang, political ties are central to understanding market fluctuations and corporate behaviours in China's unique economic environment.

" Understanding how powerful people in politics and economic strategy come together is really important to figuring out the financial flows in China” Zhang asserts. "My findings depict a nuanced portrait of the Chinese financial sector, where political connections are not merely incidental but are instrumental in financial decision-making and market behaviors."

China's expansive financial liberalisation has also led to the internationalisation of the Chinese currency, the Renminbi.  Zhang underlines that this development has far-reaching implications for the global financial system.

“This strategic elevation of the currency is depicted as a deliberate outcome of China's expansive economic reforms, which are intricately linked to the political forces that plays a pivotal role in financial decision-making in China today”, she explains.

This move positions the Renminbi as a key player in global finance, reflecting China's increasing economic clout and its strategic maneuvering within the international financial landscape. This trend underscores the intertwined nature of China's economic policies and political ambitions, reshaping the dynamics of global financial systems.

You can read the whole thesis here:
Exploring the Financial Landscape of China: Political Connections, Geopolitical Uncertainty, and Renminbi Internationalization

Lidan Zhang will defend her thesis on 24 November, at 12.00 in Hanken School of Economics, Arkadiankatu 22, Helsinki.

The doctoral defense will be held as hybrid. Participants can attend on site or via videoconference. Access the video conference via the link:
Doctoral defence Zhang

Opponent: Professor Iftekhar Hasan, Fordham University, USA
Custos: Professor Gonul Colak, Hanken School of Economics