The domestic sources of China's new role in reforming global capitalism

The emergence of the People's Republic of China (PRC, henceforth also China) as a major power raises fundamental questions regarding the future of global financial governance. China is seen to represent a new force in defining the 'rules of the game' (Douglas C. North) of global finance, particularly within the new G20 framework. This expectation, however, contrasts sharply with traditional views of China prioritizing sovereignty and therefore distancing itself from ambitious multilateralism. From a Chinese perspective, the contrast between external expectations regarding China's future role and its traditional highly concentrated international involvement is striking. In terms of policy initiatives and proposals for institutional reform, the PRC has so far kept a low profile. This gap between high expectations due to a fundamental shift in opportunities and relatively low policy outcomes due to a hesitant revision of China's role conception can be explained through an analysis of the effects of domestic demands, foreign expectations and traditional role conceptions. The article thus takes a role-theoretical approach to analyse the ongoing shift of China's policy in global financial governance in the context of the G20. It reveals a significant revision of China's key positions regarding global governance: it takes on more and more responsibility, compromises on sovereignty and supports the emergence of a new global configuration of actors. The Chinese leadership has not, however, started to push for global financial regulation with Chinese characteristics. As we argue, this is because a clear consensus on a new national role conception has not emerged (yet).