City Research Online

Abstract

Nearly three-quarters of Chinese outward foreign direct investment (OFDI) is routed through offshore financial centers (OFCs), a proportion significantly higher than that observed for most Western multinationals. Offshore finance is typically understood as a mechanism of market escape and sovereignty erosion. This article offers an alternative interpretation. Drawing on corporate-level ownership reconstruction and interviews, and focusing on Chinese investment in Africa, we show that offshore structures form part of a differentiated architecture through which Chinese capital is organized and projected internationally. Hong Kong performs a pivotal upstream function, providing globally legible corporate forms that facilitate access to international capital while buffering mainland regulatory constraints. Yet Hong Kong alone does not account for observed patterns. Chinese firms—state-owned and private—layer additional jurisdictions such as the British Virgin Islands, the Cayman Islands, and Singapore into their corporate chains, each serving distinct governance, financing, and risk-management functions. We argue that offshore operates simultaneously as a mechanism of sovereign outsourcing and as a technology of regulatory arbitrage, positioning it as a governance infrastructure embedded within contemporary global capitalism.

Publication Type:	Article
Additional Information:	© The Author(s) 2026. Published by Oxford University Press and the Society for the Advancement of Socio-Economics. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
Publisher Keywords:	Economic Sociology, Economics, Political Economy, Politics, Social Sciences, Sociology, Books, Journals
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce H Social Sciences > HG Finance J Political Science > JQ Political institutions Asia J Political Science > JX International law
Departments:	School of Policy & Global Affairs School of Policy & Global Affairs > Department of International Politics
SWORD Depositor:	Symplectic Administrator

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