Socio-Economic Review

Ronen Palan, Ricardo Soares de Oliveira, Yuan Wang, Xinyi Wei, Offshore finance as statecraft: unpacking the strategic use of OFCs by Chinese capital, Socio-Economic Review, 2026;, mwag033, https://doi.org/10.1093/ser/mwag033

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.