A groundbreaking exploration of US-China relations as seen through the lens of international finance
Rising tensions between China and the United States have kept the financial markets on edge as a showdown between the world’s two largest economies seems inevitable. But what most people fail to recognise is the major impact that the financial markets themselves have had on the creation and acceleration of the conflict.
In Financial Cold War: A View of Sino-US Relations from the Financial Markets, market structure and geopolitical finance expert James Fok explores the nuances of China-US relations from the perspective of the financial markets. The book helps readers understand how imbalances in the structure of global financial markets have singularly contributed to frictions between the two countries.
In this book, readers will find:
- A comprehensive examination of the development of financial markets in both China and the US, as well as the current US dollar-based global financial system
- Insightful observations of the roles of technology, innovation, regulation, taxation, and politics in the markets, and on their resulting effect on US-Sino relations
- Thorough explorations of the role of Hong Kong as an intermediary for capital flows between China and the rest of the world
- Suggestions for how, balancing the many varying interests, policymakers might be able to devise effective strategies for de-escalating current Sino-US tensions
Financial Cold War is a can’t-miss resource for anyone personally or professionally interested in the intersection of economics and international relations, financial markets, and the infrastructure underlying the international financial system.
Table of Contents
Preface xi
Acknowledgements xix
Abbreviations xxiii
Chapter 1 Introduction 1
Legacy of the GFC 5
Modern History of Sino-US Relations 6
The Financial Roots of Sino-US Conflict 11
The Financial Path Out of Conflict 15
Part One The Colour Of Money Turns Green 17
Chapter 2 How the US Dollar Took Over the World 19
An Ad Hoc Position 21
The Barbarous Relic 24
Two Competing Plans 30
A British Innovation 34
The Coupon Express 36
Plumbing the World’s Financial Markets 42
Niksonu Shokku 47
Volatility 51
‘Risk Free’ Assets 57
Boom and Bust 62
Chapter 3 Whose Problem? 65
The Unipolar Moment 69
The Almighty Mr. Market 74
Emerging Markets Crises 84
The Weakest Link 98
The Music Stops 102
Anyone for Tea? 108
A Tipping Point? 113
Part Two Capitalism With Chinese Characteristics 123
Chapter 4 From First World to Third and Back Again 125
Maritime Power 131
The Milk of Paradise 135
Wars and Revolutions 147
A Leap into the Abyss 156
Herding Cats 161
Crackdown 172
Journeys to the South 177
A New Path 181
The Bird’s Nest 187
Chapter 5 Two Steps Forward, One Step Back 192
Going Public 197
The Protection Racket 206
The Price of Money 212
Still Building, But Will They Come? 221
Alien Attack 228
Who Will Look After Grandma? 237
Connecting China and the World 242
Can’t Buy Me Love 262
Part Three The Financial Cold War 271
Chapter 6 A New Cold War? 273
A Close Call 277
Fly Me to the Moon 279
Tax Me If You Can 284
A War of Words? 291
Geo-economic
Warfare 294
Chapter 7 The Role of Markets in the 21st Century 307
Selective Efficiency 310
What Happens When Competition Dies 313
Wrong Incentives 318
Bubbles and Cycles 321
Funny Money 328
We’re All in the Same Boat 342
Chapter 8 Avoiding the Thucydides Trap 343
Admitting the Problems 345
A New Bretton Woods? 350
MAD for Markets 362
It All Starts with Leadership 365
Afterword 369
Cast of Characters 381
Bibliography 399
Notes 423
Index 453
