Risky Expertise in Chinese Financialisation

Returned Labour and the State-Finance Nexus

Giulia Dal Maso

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN:
  9789811568237
• eBook ISBN:
  9789811568244
• Topic: Social Sciences
• Subtopic: Cultural & Social Anthropology
• Index: Social Sciences

This book focuses on the subjectivities of stock market investors to explore tensions within the Chinese state's engagement in contemporary financial capitalism. It adopts a genealogical method to investigate how the production of foreign-trained financial experts (haigui) and informal experts (sanhu) points to paradoxes in China's efforts to cultivate financial expertise. Chinese financialisation relates to the state's project of financialising human capital in reaction to a contractualised labour market and the vanishing welfare state. Through ethnographic inquiry, Dal Maso shows the Chinese stock markets are crucial to the new redistributive regime where wage labour risks losing its primacy. Here, one can observe how the relationship between money and wages in China is being reworked and witness the development of a new economic order in which the state's legitimacy becomes increasingly dependent on its capacity to jiushi–to rescue the market in times of crisis.

© The Author(s) 2020

G. Dal MasoRisky Expertise in Chinese Financialisationhttps://doi.org/10.1007/978-981-15-6824-4_1

Begin Abstract

1. Introduction

Giulia Dal Maso¹

(1)

Department of Cultural Heritage, University of Bologna, Bologna, Italy

Giulia Dal Maso

Email: [email protected]

Keywords

ChinaFinancialisationSubjectivityStock marketsWage labourFinancial expertise

End Abstract

After spending 2008 studying Chinese in Beijing on a scholarship I had received from the University of Bologna, I returned to China in 2010 to take up work with the Istituto Italiano per l’Africa e l’Oriente (IsIAO), a publicly funded Italian research institute, which had a newly opened section in Shanghai. It was affiliated with a Chinese university, and I was collaborating with Chinese colleagues in the management of different projects. It was an enjoyable atmosphere and experience, although I remember that during work breaks, I rarely had the company of colleagues for a stroll around the block. During lunch, my Chinese colleagues would remain in the office, bent over their desks, seemingly overloaded by work. Typically, they ordered their lunch to the office and ate it in front of the screen. I felt guilty—my work did not seem to be as hard as theirs. One day, I noticed Miss Fang, the administrative executive who had been working with me on a cultural project report, was staring at some data on her screen. At first, I was worried that I had forgotten that we had to finish some financial reporting, but when I asked Miss Fang what she was looking at, she replied she wasn’t in fact working—she was mai gupiao (“buying shares”) and investing some of her money on the stock market. Her answer was unexpected, as she seemed an unlikely candidate for such activity. She went on to explain that her father, back in Anhui (a slightly rural province in the Chinese hinterland), had encouraged her to invest in this way. He had apparently made quite a lot of money in the past, though this had not been the case for Miss Fang, who had had no luck and didn’t really know how to invest. Though repeatedly disappointed, she kept rolling the dice.

This and similar episodes had sparked my curiosity to explore some of the distinctive features of the Chinese stock market which would later form part of the object of this book. After the global financial crisis (GFC) had struck, my Shanghai salary—which had been pegged at the Chinese standard of 500 Euros per month—was cut when the Italian research institute I was working with was shut down as a result of the new austerity measures implemented by the Monti government in Italy. After losing my income, despite the booming post-Expo Shanghai economy, my own financial situation had become precarious and the economic anxiety of finding a new job to enable me to continue my studies in China weighed heavily upon me. Finally, after months of job seeking, I realised that the only jobs available were low-paid casual opportunities with foreign companies trying to set up business in China. Furthermore, competition was fierce—many young professionals in Shanghai like me had been driven from Europe by the collapse in employment opportunities there following the GFC. It was very common for foreign companies to entice young compatriot professionals with Chinese language skills into an internship or other precarious contract in the Shanghai job market, dangling the prospect of entry into lucrative careers.

To a certain extent this dynamic was re-producing the geography of Europe’s own unemployment situation in Shanghai. Young professionals from the economically most disadvantaged European countries lacked the support of the scholarships and networks of their French, German or British colleagues, whose national governments were investing public funds in them in order to increase national cultural capital. Despite the emphasis on globalisation, the rise of transnational professionalism in a new global division of labour and the subsequent emergence of Shanghai as a vibrant global city, I still found myself unhelpfully entrenched within the “provincial,” “parochial” mind-set of Italian companies abroad. In addition to this, following the financial crisis in Shanghai it wasn’t just young European unemployed professionals like myself looking for new career prospects in China, but also laid-off traders and brokers from the most powerful and prestigious US financial institutions such as Meryl Lynch and Lehmann Brothers. Even for these, the Shanghai financial market didn’t live up to its publicity as a new “promised land,” and they could not hope to match the salaries that they were previously used to in the United States.

In this book I argue that through the process of financialisation China is constructing a new mode or form of capitalism (Keith et al. 2014). I argue that the state is the primary mobiliser of a new Chinese economic life leading to financialisation. By the term “financialisation,” I refer to a shift in the economy which has seen an increase in the influence of financial intermediation—performed in China mainly by the state through its policies and its agencies—together with a rising tide of financial calculations and assumptions spilling into everyday life. My observations do not consist of a macro-economic or structural inquiry into Chinese market specificity in order to argue for an exceptional economic model. Instead, in order to grapple with some of the distinctive features of Chinese financialisation, I look from an alternative angle, one which focuses on a particular subjectivity: that of the haigui (a Chinese term meaning “student returnees”) from Australia. The haigui in my study are Chinese students who have gone to study in Australia in order to acquire a measure of financial expertise and, at the encouragement of the Chinese state, have then returned to Shanghai to advance a career in the Chinese financial market. Through the empirical investigations outlined in this study, I will show how these returned aspiring financial experts are frequently unable to step into their preferred roles as consultants and advisors. Faced with this disappointment, more than half of my interviewees tend to cast off their “expert guise” and resort instead to autonomous, self-managed investment practices in the stock market.¹ I show that once they enter into the Chinese “stock market arena” (Hertz 1998), the haigui join the low-end, non-expert actors in Chinese mass financialisation known as the sanhu (“scattered players”).² The sanhu consist of a heterogeneous group of investors—mostly lay investors and financial self-learners—who resort to the stock market as a way to make “extra money” in the face of their precarious social and labour conditions. The investment strategies of the haigui then acquire the characteristics of informal expertise and contingent practices associated with the sanhu .

I suggest that an approach to financialisation which takes as a premise the subjectivities generated by it, provides a critical method for the study of the particularities (specificity) of financialisation in China. This unique financialisation, I argue, provides a lens to grasp the heterogeneous and polychromic form of contemporary capitalism. Capitalism is rooted in its universal foundations and commonalities (Chibber 2013; Jessop 2011; Streeck 2010)—that is, the role of capital accumulation, the constant tendency to profit growth, as well as capital’s tendency to “subsume traditional relations of social exchange under the money economy, and its subsequent critical instability, and continuous change” (Streeck 2012, 5). Yet, the emerging integration of territories and social orders under the over extending frontier of capital has not translated into a homogenous order but into a deeply fragmented, discontinuous and heterogeneous one. The way capitalism is constantly mutating and renovating its cartography seems to displace most attempts to categorise this transformation by definite patters. The contemporary capitalist order has both surpassed the world system theory—according to which capitalism transformed hierarchically on centre-periphery model (Amin 1976, 1979; Wallerstein 1974, 1979; Frank 1967)—and exceeded meta-narratives that attempt to portray capitalism through singular spatial, sectoral and institutional diversity within and across national models (Schmidt 2003, 2009; Hall and Soskice 2001).

These approaches often risk of fetishising national territory focusing on national models, neglecting the interdependence of the development of social and spatial processes of accumulation at a world level (Arrighi 1994; Harvey 2003). In accounting such historical and geographical diversity, when exploring the Chinese case—characterised by deep internal regional and local heterogeneity, the overlapping of multiple labour and production regimes (Rocca 2003), and strong interrelations with other forms of capitalism—the search for “an ‘essential’ form of institutional-cum-macroeconomic coherence” seems futile (Peck and Zhang 2013, 387).

Thus, I seek to conceive the Chinese capitalist configuration in a way that goes beyond simplistic t...

Table of contents

• Cover
• Front Matter
• 1. Introduction
• 2. The Chinese Genealogy of Financial Expertise
• 3. Fostering Chinese Talents Abroad: The Paradox of the Returnees (Haigui)
• 4. Circuit of Expertise
• 5. Shanghai: The Returning City
• 6. The Financialisation Rush
• 7. The Precarious Ecology of Chinese Financial Expertise
• Back Matter