Risk Cultures in China


The project investigates the sorts of risk involved in the construction of markets in China. It is qualitative, sociological research based on six detailed case studies.

Chinese drago costume head roaring.

About this project

This project is funded by the ESRC and is headed up by Prof Scott Lash, Prof Michael Keith, and Dr Jakob Arnoldi.

This project forms part of the ESRC's World Economy and Finance Programme. The principal investigators are Jacob Arnoldi, Michael Keith and Scott Lash. Over three years (2006-2009) the project extends the Centre's work internationally, focusing particularly on the forms of social and economic change in contemporary urbanism in Shanghai and Hong Kong.

What the project covers

In each case we look at how a given organization or firm together with a number of other economic and political agents form a network to construct a market. We are studying these networks insofar as they are comprised of a group of such subcultures, involved in signalling behaviour, information transmission, communication and trust relations. These are risk-sharing activities. They construct markets as sites of reduced uncertainty.

These markets are better understood as quasi-markets, because of the weak enforceability of contracts, unpredictable property law, and because the agents in these new economic fields include a plurality of bodies from district, local and national state, as well as universities and public sector firms. These are at times economic actors and at other times political actors. We will study these quasi- markets as sites in which agents share risks and reduce uncertainty that is necessary for them to take (investment) risks.

This research is thus an economic sociology of risk cultures: a sociology of the networked construction of quasi-markets through organizations that are involved variously and sometimes simultaneously in complex risk- taking and risk-sharing activities. Our work tracks cases of risk cultures, network formation and market constitution over a period of 24 months fieldwork based in China, principally in Shanghai but also considering related networks in Hong Kong.

The project links to other research in the ESC World Economy and Finance Programme in being a detailed study of one very major world economy, and through its focus on risk in the context of incomplete markets. Its sociological perspective adds a dimension to the more economics-oriented studies in the programme. Its qualitative case-study methodology adds a dimension to the quantitative aggregate methods of other studies. Its particular study of risk in terms of firm subcultures adds a dimension to the studies of sovereign and household risk of other projects.

The case studies are of a major Chinese state-owned bank, a British bank with very substantial operations in the mainland; one of Shanghai's largest property developers; a major London property developer; a boutique investment bank specializing in the media sector; and the Hong Kong Exchange. The London case study is necessary to yield a comparative perspective on the specific nature of the Chinese risk cultures. Each case is a prism through which to look at networked market construction by a plurality of firms and other organizations in a given sector.

The Shanghai property developer for example is a prism through which to witness and describe its risk-investment taking activities in the context of other major developers from Shanghai and Hong Kong, and investors from local and district states as well as property development by universities and public-sector manufacturing firms. All will be involved as networked subcultures, taking and sharing risks in the development of this particular quasi-market. The (90 per cent) publicly owned Chinese bank is a prism through which we view the networked activities of other state and foreign banks, as weall as state regulatory and political bodies, themselves promoting the partical privatization, corporatization and IPO of the bank. The importance of state bodies as economic and political agents in such market construction as well as the general framework of our project makes it also a study in political economy.

The research will draw data from observation, interviews with many key informants, documents and video. Its outcome will be a 'thick description' of such networked quasi-market formation in the six cases. We also draw selectively on a number of tools established by the thriving sub-discipline of economic sociology, including software programmes for analysis of linguistic cues and straightforward algebraic modelling.