Derisking Without Delegation: The Redistribution of Transitional Risk in China

• In Event: AI, Digital Capitalism, and Infrastructural Power

Abstract

Derisking has become a dominant idiom of statecraft in contemporary capitalism, often framed in North Atlantic contexts as “producing investibility” by socializing downside risk to crowd in private institutional investors. This paper offers a different account by analyzing China’s recent financial reforms as derisking through financial reconfiguration without delegation. Bringing a derisking lens to debates on financialization and growth, I argue that China’s expanding capital markets and “financial power” are not pursued as ends in themselves or as outward capitalist expansion, but as state-led risk redistribution aimed at unwinding a debt-led growth regime and enabling technological upgrading. Using macro-financial data, policy documents, and institutional analysis, I advance two claims. First, deleveraging and debt-resolution efforts operate as balance-sheet derisking: they revise crisis-management boundaries, rewrite expectations anchored in implicit guarantees, and redistribute risk across central and local state actors, banks, and quasi-public vehicles. Second, capital-market reforms constitute market-making derisking paired with state-linked institutional investors and guidance funds that buffer risk while steering investment. The paper highlights derisking as a distributive politics of crisis adjustment.

Author

• Xiaoting Lu, University of Virginia