Financial innovation in China’s Greater Bay Area: Financial connectivity, institutional bridging and China’s financial statecraft

This article examines the innovative financial connectivity schemes in Hong Kong and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) in southern China to understand China’s regionalized financial statecraft and their implications for the global financial order. While the existing literature tends to depict a coherent “state-capitalist” China exercising offensive financial statecraft to contest the neoliberal global financial order, we highlight the domestic institutional hybridity and spatial dynamics of China’s financial statecraft. Bridging the subnational, national, and global levels of analyses, we argue that these financial connectivity schemes serve as a form of institutional bridging and defensive financial statecraft for China to co-opt and hedge against the US-led global financial order, and to reconfigure its financial sovereignty in cross-border governance. Embedded in China’s domestic institutional hybridity and territorial dynamics, such financial statecraft plays out as a process of cross-border/boundary market-making that aligns Hong Kong closer to China’s national strategies, while maintaining its international role.