How Segmented Globalization Undermines Democratic Prospects in China

Why has China's integration into the global economy reinforced rather than undermined the Chinese Communist Party’s (CCP) authoritarian rule? This article advances a theory of “segmented globalization” to explain how China's distinctive form of globalization creates structural impediments to democratization. I argue that “segmented globalization”—the symbiosis between open trade and closed finance combined with elite emigration—produces a self-reinforcing equilibrium that consolidates CCP rule. First, China's closed financial system channels vast resources into state control. Second, neoliberal export policies paradoxically reinforce financial closure. This export-finance nexus enables the CCP to massively invest in coercion and patronage, maintain the structural dependence of the nascent capitalist class on the party-state, and cultivate output-based legitimacy. Third, elite emigration makes potential agents of democratization relocate abroad rather than demanding domestic political changes. However, the recent US-China strategic competition may threaten this equilibrium by undermining the export-finance nexus that has sustained CCP rule for decades.