China's Vulnerability Paradox

Abstract China’s Vulnerability Paradox presents an original framework to explain the uneven transformations in global commodity markets resulting from the dramatic, contemporary expansion of China’s economy. Within a short period, China emerged from being an almost complete outsider to becoming one of the principal players in most global commodity markets. Despite this, China at times displays vulnerabilities toward global commodity markets, given high levels of import dependence but also, this book argues, because of unequal positions of market power. Why is it that despite China’s rising salience, Chinese stakeholders are often not able to shape markets in their preferred direction? Why have some markets undergone fundamental changes in the way they operate while other similar markets have been more resilient? And how can we explain the uneven liberalization dynamics across markets? Through the case studies of iron ore, potash, uranium, and copper markets, Pascale Massot argues that the balance of market power between Chinese domestic and international market stakeholders and the way it evolves over time explain their behavior as well as the likelihood of global market institutional change. A change in relative market power between dominant producers and consumers can act as a catalyst for change in global market institutions. At a time of deepening US-China tensions and debates about the future of the global economy, this book provides an alternative, granular understanding of the resonance dynamics between the domestic political economy of large emerging economies and the political economy of global markets.