TAK-WING NGO, GLOBAL CHINA'S SHADOW EXCHANGE, 2024.
Economic globalisation supposed to be the result of countries that trade products, benefitting from their comparative advantage. According to David Ricardo, trade in goods that one country produces more efficiently than the importing country would lead to greater welfare for all. Yet this foundational idea of having entire products made in one particular country is not today’s version of globalisation, as it instead relies on myriads of supply chains. These trade relations often persist beyond the regulatory realm of states, constituting an alternative reality to the WTO-led international economy. How can we understand networks that control commodity flows worth billions of U.S. dollars; and how do actors in or linked to China facilitate these exchanges?
Tak-Wing Ngo’s brief monograph presents a deeply researched study of informal transactions and trade flows that complement the WTO-based international economic order. At least to some degree, these shadow exchanges even enable and extend the supply chains that multinational corporations have been building for more than three decades.
The study is structured in six chapters. Following the introduction, chapter two provides a brief overview of the global shadow economy. Then, chapter three takes a close look at China’s role. Chapters four and five scrutinise the networks, agents, and “grey governance” arrangements that enable shadow exchanges. The concluding chapter relates these large-scale operations to the current stage of globalisation.
The author portrays practices that people deploy who are part of border-crossing operations, revealing the well-organised and by no means occasional character of these exchanges. This part of the study is particularly instructive. The examples derive from extensive fieldwork that the author conducted along the borders of China and elsewhere. They include trade in parallel goods in Hong Kong and Macau, surrogate shopping in Tokyo, as well as the transport of various products and components to Vietnam, Myanmar, Kazakhstan, Kyrgyzstan, and Russia.
Chinese entities and agents produce, consume, and distribute shadow products. Networks that engage in these operations are linked to China, either by location or ethnicity. Indeed, China’s central role in these exchanges deserves more attention, as WTO member states seek to revise the existing economic order and shadow exchanges will adjust accordingly.
The book is a valuable read for scholars in the field of the global political economy. No doubt, the worth of the goods and transactions that can be linked to shadow exchanges as well as the number of people that are involved in the dealings justify further analysis of this phenomenon. China experts will find the perspective of the book refreshing, as the country’s global presence is assessed by focusing on actions and connections that proceed beyond state policies. The book is also interesting for people who want to learn more about the position of developing countries in the global economy, mainly because it presents an account of interactions with China that is often missed in reports about big projects and state-led investments.
Some might imagine shadow exchanges as petty or bottom-up globalisation. Yet this book masterfully shows that these activities are vital for the international economy as we know it; and China has emerged as the centre around which shadow exchanges revolve.