Cycles and Transformation: China’s State-Capitalism as Adaptive Strategy in the Arc of Capitalist Governance

This article offers a new analysis of China’s politico-economic system from a world-systems perspective. My basic argument is that the novelty of China’s system is not, as McNally (2020) argues, its hybrid fusion of neoliberal market dynamics with strong centralized political control. China’s real historical significance comes from the combination of a centralized, state controlled financial governance structure that is highly insulated from the control of outside actors situated within China’s large extended geo-space. I argue that China’s intense state control of economic reality, and especially its “internalization” of financial institutions within its state architecture, can be seen as an adaptive strategy that makes sense from the perspective of the long term development of governance within the capitalist system. I then conclude with observations around the possible consequences for established core powers of China’s structural separation and power in the financial realm.