Rising Illusion and Illusion of Rising: Mapping Global Financial Governance and Relocating China

Abstract

Abstract The empirical changes in global financial governance (GFG) and China's position in it, against the backdrop of the 2008 global financial crisis and China's economic rise in recent decades, suggest two plausible conclusions: (1) the present GFG system has been significantly reformed and improved by forming a networked architecture and a regime complex; (2) China's economic rise has automatically extended to China's rise in GFG, embodying its full integration into the architecture and regime. This article constructs a three-dimensional international political economy (IPE) analytical framework to reexamine the two conclusions and thus finds two illusions: an increasingly widespread—or rising—illusion of a much improved and more stable GFG system and an illusion of China's rising in GFG via an automatic transformation from economic might to governance power. The “rising illusion” of a much-improved GFG risks resulting in a reform dilemma, while the illusion of China's rise in GFG risks escalating the China-US and, more broadly, emerging-dominant states conflicts into full-scale confrontation. The prevalence of these two illusions highlights the need for greater attention from academic and policy spheres to relevant issues.