The ‘going out’ of Chinese businesses and China’s economic statecraft: Beijing’s dilemma between domestic concerns and global ambitions

As China’s outbound economic activities multiply, Beijing is widely believed to impel the international expansion of Chinese firms to support its political goals. China’s vast state-led economy and centralised political leadership help operationalised this grand strategy. Contrary to such a position, the analysis in this article illustrates that the operations of China’s top state banks – the financiers of and promoters of the renminbi’s international use – and private Internet giants, the leading players of the Digital Silk Road, are overwhelmingly confined within Chinese territory. This outcome is the direct result of the design of the country’s domestic political economy. China has strengthened its state sector and consolidated its ruling party in a manner that constrains the levers of economic statecraft, and specifically the scope and reach of the high-profile ‘going out’ policy. Beijing’s capital movement restrictions channel cheap capital to the state sector while inhibiting the global strategies of Chinese banks and firms. Beijing’s crackdown on what has been called ‘disorderly’ capital expansion, whereby China’s technology companies achieved previously unheard-of market power, solidified the state sector. At the same, the regime’s moves weakened the capacity of Chinese Internet companies to expand internationally and diffuse Chinese digital technologies abroad.