The Cashless Revolution: China's Reinvention of Money and the End of America's Domination of Finance and Technology
Book Description
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Global finance is on the verge of upheaval resulting from China’s dramatic innovations in financial technology (fintech). In The Cashless Revolution: China’s Reinvention of Money and the End of America’s Domination of Finance and Technology, Martin Chorzempa reveals how this global revolution will be as powerful as those wrought in social media, retailing, and advertising by giants such as Amazon, Facebook, Google, and Twitter.
China has in effect reinvented the concept of money, transforming a backward, antiquated cash-based finance system into one centered on super-apps created by technology giants Alibaba and Tencent. This book is a portrait of a system grappling with unprecedented challenges, an investigation into the financial and ethical questions in their wake, and an exploration of the impact on the lives and habits of people across the globe.
Martin Chorzempa, senior fellow since January 2021, joined the Peterson Institute for International Economics as a research fellow in 2017. He gained expertise in financial innovation while in Germany as a Fulbright Scholar and researcher at the Association of German Banks. He conducted research on financial liberalization in Beijing, first as a Luce Scholar at Peking University’s China Center for Economic Research and then at the China Finance 40 Forum, China’s leading independent think tank. In 2017, he graduated from the Harvard Kennedy School of Government with a master’s in public administration in international development.
Editorial Reviews
“…an authoritative, comprehensive and thoughtful account of a remarkable episode in technology and finance that offers lessons for the United States as it seeks to encourage innovation in finance without putting consumer or financial stability at risk. It is written clearly enough for readers who are expert in neither finance nor Chinese politics.” David Wessel in the Washington Post
“China is profoundly important, fintech is profoundly important, so how they come together will have much to do with how the global financial system plays out. The Cashless Revolution is a very valuable and important summary of the relevant issues.” Lawrence H. Summers, Charles W. Eliot University Professor, Harvard University, and former secretary of the Treasury
“A comprehensive, highly readable look at China’s cashless revolution: what went right, what went wrong, and how we can learn from China’s experience as we strive to modernize our own payments system.” Sheila Bair, former chair of the US Federal Deposit Insurance Corporation
“In this superb account, Chorzempa chronicles the breakneck speed in the development of the fintechs in China, starting from their humble origins as payment add-ons in e-commerce to all-seeing big techs that later incur the ire of the authorities, all within the space of ten years. Chorzempa’s sure grasp of the political economy provides much-needed context to understand current developments. The Cashless Revolution is a must-read for any serious observer of digital innovation and of China.” Hyun-Song Shin, Bank for International Settlements
“Chorzempa brings us an extraordinary look into the future of money and with it, the future of both global power and daily life. Having taught himself Mandarin and immersing in Chinese life, he tells the incredible story of the rise of China’s powerhouse fintechs—their reining in by the Chinese government, and the dilemmas now facing all the world in seeking to harness the leveling power of technology while protecting privacy and averting state power on a scale never seen before—enabled by financial technology. Equal parts business chronicle, social and political analysis, and storytelling, The Cashless Revolution is one of those rare books that opens readers’ eyes. The world will never look the same.” Jo Ann Barefoot, CEO and founder, Alliance for Innovative Regulation, and former deputy comptroller of the currency
“The Cashless Revolution is a fascinating analysis of how Chinese entrepreneurs, despite setbacks along the way, transformed Chinese finance from a low-tech backwater to the world’s largest and most-advanced market for digital finance.” Nicholas R. Lardy, author of The State Strikes Back
“China is at the forefront of digital financial innovation, from mobile payment to online investment, and from digital lending to central bank digital currency. While rapidly transforming the financial structure, Chinese fintech also created immense new challenges for the policymakers. The Cashless Revolution offers an authoritative analysis of this very dynamic new financial sector—what happened, which factors contributed to the dramas, and where it will likely head.” Yping Huang, Peking University
“…an authoritative, comprehensive and thoughtful account of a remarkable episode in technology and finance that offers lessons for the United States as it seeks to encourage innovation in finance without putting consumer or financial stability at risk. It is written clearly enough for readers who are expert in neither finance nor Chinese politics.” David Wessel in the Washington Post
Contents
Introduction: Uncharted Territory
PART I. FINANCIAL REPRESSION AND THE RISE OF CHINESE TECH (2002–2012)
1 The Rise of the Super-apps
2 Repression Ripe for a Revolution
PART II. THE CAMBRIAN EXPLOSION OF FINTECH
3 Fintech Brings Financial Freedom (2013‒2017)
4 A Fintech Wild West
PART III. PARTY CONTROL AND INTERNATIONAL EXPANSION
5 Social Credit and Crackdown on Risk
6 Chinese Fintech Goes Abroad
7 Techlash
8 The Costliest Speech in History
9 From Liberator to Oppressor?
Acknowledgments
Notes
Index