Emerging powers and systemic change : China's impact on global commodity markets

• Main Author: Massot, Pascale
• Language: English
• Published: University of British Columbia 2015
• Online Access: http://hdl.handle.net/2429/54653

How are global economic institutions transformed at times of power transition? Why have some international markets for important raw materials undergone fundamental change in the way they operate as a result of China’s emergence, while other such markets have been more resilient to change? The goal of this dissertation is to explain diverging global outcomes from the dramatic and contemporary expansion of China’s economy. By doing so, I shed new light on the political economy of global markets, why they operate the way they do now, and how they have evolved over time. I trace key variances in China’s effect on global markets to the interaction of Chinese domestic industrial structures and the pre-existing structures of global commodity markets. The structure of key industries within China varies: some are concentrated, some fragmented, some very sensitive to price signals, and others less so. Likewise, the structures of various global commodity markets varied significantly before China’s emergence as a dominant global consumer in the twenty-first century. I argue that transformations in market power relations between consumers and suppliers increase the likelihood of institutional change in global markets. Price trends influence market stakeholders’ preferences for global pricing regimes, but they cannot fully explain the direction of change. Market power – including the capacity to coordinate others and the capacity to extract rent – also motivates behaviour. Combining comparative case analysis of the iron ore, potash and uranium markets with careful process-tracing, I unveil the full picture, from domestic variables to international-level outcomes. I show the tremendous concentration of market power in global markets prior to China’s emergence; that China’s market power, despite its economic size, is in many ways weak; that some of the largest systemic changes have been the result of this Chinese position of weakness; and that China’s emergence has led to marketization, despite it being a state-led hybrid economy. This is a study of institutional resonance and complementarity between global markets and their systemically relevant consumers. More broadly, this dissertation seeks to contribute to ongoing debates about the systemic resilience of global market structures, and the domestic determinants of global economic power. === Arts, Faculty of === Political Science, Department of === Graduate