The Chinese State’s Perception of International Monetary Order A Dissertation Submitted in Partial Fulfilment of the Requirements for the Degree of Doctor Rerum Politicarum to the Department of Political and Social Sciences of Freie Universität Berlin by LIU Weihao Berlin, 2020 Supervisor: Prof. Dr. Eberhard Sandschneider Second examiner: Prof. Dr. Michael Bolle Date of defense: 18/12/2020 ------------------------------------------------------------------------------------------------------------------------------- Declaration of authorship I hereby declare that I have completed the dissertation independently without the use of the literature and resources other than those specified. Berlin, 12/2/2021 Weihao LIU Acknowledgments Acknowledgments This dissertation would not have been possible without the guidance and help of many people who are acknowledged herein. First and foremost, I wish to express my sincerest gratitude to my supervisors and advisor, Prof. Dr. Eberhard Sandschneider, Prof. Dr. Michael Bolle, and Prof. Dr. Theocharis Grigoriadis, who have supported me throughout the course of my dissertation with their time and knowledge, whilst granting me the freedom to work on my own way. Without their help, this work cannot be realized. I am sincerely obliged to them for their lasting support. Finally, I want to thank myself for going against the expected. For the resolve and passion that I dedicated to this original research project. i Acknowledgments ii Abstract Abstract This dissertation analyzes what has framed and conditioned the Chinese State’s perception of international monetary order, which is so far of problematic interpretation. Market economic reforms can be seen as what indicates its views on the matter. However, the unfulfilled promise to open the capital account since 2007 and the concurrent crisis in the international monetary system constitute what has perplexed the interpretation of its perception. It is problematic not only to the US imagination of China but also to China’s imagination of itself. So, this research will conduct a critical analysis of several issues in what regards the postwar international monetary system, neo-liberalism, the being of the Chinese State, and its perception. Thus, the research is situated within a broad, ongoing debate concerning the rise of China and the future of the liberal international order. The first issue concerns the State’s general being and its perception that will be addressed through an in-depth inquiry into the metaphysical foundation, which underlies neo-liberalism, the modern conception of the State, and the relationship between knowledge and perception. The second issue concerns the “nature” of the postwar international monetary system that will be addressed through the analytics of American IR knowledge and discourse to show how the international monetary system has been conceptualized differently and how the dominant power/rising power relationship has been framed accordingly. This analysis will analyze each paradigm’s narrative ground that renders possible the quasi- perception of the other’s perception and the “scientific” determination of China’s identity, interest, and power relationship with the United States. The analysis will revisit two critical junctures – i.e., the collapse of the Bretton Woods system and the US subprime mortgage crisis – and compare France and China’s characters in two stories. The mismatch between the theoretical expectation and China’s actual behavior necessitates a new approach. The third issue concerns China’s being that remains “enigmatic” to conventional IR knowledge due to the lack of in-depth theorization of the Chinese State. All three IR paradigms look for a continuous, coherent representation of unity. To address this issue, this dissertation adopts a Foucauldian inspired perspective that allows observers to see discontinuity and inconsistency. The research will recontextualize the post-1978 economic reforms, especially the 2007 financial reform, against a backdrop of growing regional heterogeneity in China since the 1950s. This analysis will point to the acute interregional confrontations since the 1980s and the subsequent formation of a triadic political economy (Beijing-Shanghai-Shenzhen). This dissertation argues that the derailment of the 2007 capital account reform has little to do with the concurrent global financial crisis, which only plays a reinforcing role, nor with the resentment at the dollar’s hegemony. Quite the contrary, the Wen Jiabao government supports the international dollar standard by cooperating with the United States. The derailment of the reform momentum is just a matter of more complex struggle within China and has everything to do with the triad-based interests. The reason is closely related to the political economy of interregional relations, and the established fiscal, exchange rate, and capital account regimes. An analysis of the identities of Tientsin, Beijing, Shanghai, and Shenzhen will show the different impacts of their identities on China’s politics. This dissertation thus helps formulate an alternative theory that can explicate what has affected China’s perception of the international monetary order. In the end, this dissertation raises attention to the rise of the Beijing-centric economic geography and the ideological lineage between Beijing’s own urban project (i.e., “Big Beijing” since the early 2000s) and the “One Belt One Road” (since 2013). Keywords: China, Chinese state, discourse, international monetary order, international monetary system, knowledge, neo-liberalism, perception, power relations, exchange rate, capital account, Foucault iii Abstract iv Table of Contents Table of Contents Acknowledgments ........................................................................................................................................ i Abstract ....................................................................................................................................................... iii Table of Contents ........................................................................................................................................ v List of Tables and Figures ........................................................................................................................ vii Abbreviations ........................................................................................................................................... viii Introduction ................................................................................................................................................. 1 1. The beginning of the reordering of things......................................................................................... 2 2. Main question .................................................................................................................................... 3 3. Research design ................................................................................................................................ 5 4. Plan of dissertation ............................................................................................................................ 9 Chapter I. International Monetary Order, Neo-liberalism & the Chinese State ................................ 11 1.1) Literature review on international monetary order and the rise of China .................................... 11 1.2) The paradoxical outcome of the encounter of China with neo-liberalism since the “end of history” ................................................................................................................................................ 15 1.3) State theories: a critical analysis .................................................................................................. 19 1.4) The demythologization of the Chinese State ............................................................................... 32 1.5) The conventional interpretations of the State’s perception in IR ................................................ 40 Chapter II. Some Metaphysics on Perception, Knowledge & Discourse ............................................. 45 2.1) Introduction ................................................................................................................................. 45 2.2) Relations of perception with reality ............................................................................................ 45 2.3) Relations of perception with truth ............................................................................................... 50 2.4) Knowledge and Being.................................................................................................................. 58 2.5) Episteme, paradigm & discourse ................................................................................................. 69 2.6) Conclusion ................................................................................................................................... 75 Chapter III. The Economy of American IR discourses ......................................................................... 77 3.1) Introduction ................................................................................................................................. 77 3.2) The successive emergence of three American IR discourses ...................................................... 78 v Table of Contents 3.3) The discursive formation of the American