The Neoliberal Globalization Link to the Belt and Road Initiative: The State and State-Owned-Enterprises in China [alternative title: Bilateral and Multilateral Dualities of the Chinese State in the Construction of the Belt and Road Initiative]

The Chinese state has integrated its economy into the neoliberal globalization of trade and investment without neoliberalizing its own financial markets, and to ensure stability, the state applies strict controls on interest rates, capital movement and the value of RMB. The Chinese state policies have divided the domestic economy into upstream and downstream domains whereby the state extracts rents from the private businesses profits downstream and then pump them upstream to underwrite the SOEs operating as monopolies (domestically), and as strategic traders, and investors (internationally). The state is the largest owner in the economy through holdings of shares in listed companies, direct ownership of enterprises, influence over privatized SOEs, and ownership of the public utility companies. The state has thus structured the domestic market in a way that has made the appearance of the BRI a cogent outcome. The BRI is a demand creation project for two distinct zones of the state-owned internationalized businesses, firstly, the Chinese state finance sector and secondly other sectors that primarily include the construction, logistics, and utilities. The Chinese state’s regulatory characteristics makes the financing and construction of the BRI possible, and reverential to the aims of the state. Further, the Chinese state has increased its weight in the Bretton Woods financial institutions, the IMF, and World Bank, while institutionalizing its reach in the formation of the Asian Infrastructure Investment Bank and the co-creation of the New Development Bank. These processes have simultaneously ensured commitments to multilateralism and bilateralism.