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A political anthropology of finance: Profits, states, and cultures in cross-border investment in Shanghai

Research Institute of Anthropology, East China Normal University; Université Paris-Dauphine, CNRS


Based on participant observation with financial professionals working for a mergers and acquisitions consultancy company in Shanghai, this essay shows that they conduct these transactions by mobilizing imaginaries of “profits,” “states,” and “cultures.” These imaginaries concern professional and nonprofessional life and are multiple, sometimes contradictory, and mutually constitutive. This shows that the analytic claim about a “real economy,” against which financial practices would be gauged, misses the multiple meanings whereby these practices make sense for those who carry them out. The article proposes instead a pragmatist approach of money, whose political import would be to focus on how the practices and meanings of financial professionals, as they channel money to certain activities at the expense of others, contribute to produce global social hierarchies in the access to monetary resources.

S’appuyant sur un travail d’observation participante avec des financiers travaillant pour une agence de consulting spécialisée dans les fusionnements et les acquisitions à Shanghai, cet essai montre que les financiers mènent à bien leurs transactions en ayant recours à des imaginaires spécialisés du “profit,” des “états” et des “cultures.” Ces imaginaires sont déployés tout aussi bien dans la vie professionnelle que non-professionnelle et sont multiples, parfois contradictoires, et co-constitués. Cela montre que la proposition analytique contenue dans le concept d’économie réelle, à l’aune de laquelle les pratiques financières pourraient être évaluées, ne capture pas les significations diverses de ces pratiques pour ceux qui y prennent part. Cet article propose donc plutôt une approche pragmatiste de l’argent, dont la pertinence politique est qu’il rappelle que les pratiques et les interprétations des financiers, qui font transiter l’argent vers certaines activités au dépend d’autres, contribuent à produire des hiérarchies sociales globales par rapport à l’accès aux ressources monétaires.

This article proposes to analyze global financial flows based on fieldwork carried out in a consulting company working in the domain of cross-border mergers and acquisitions in Shanghai. Marcel Mauss highlighted the fact that exchanges within and among social groups have multiple co-constituted meanings, which are, among other possibilities, economic, moral, political, and religious. The hierarchies within and between groups, constituted with those meanings, are thus both determining for and transformed by the objects exchanged and the modalities of exchange. Mauss thus stressed that the idea that the “economy” should be distinguished from the “political” or “religious” domains is itself part of a particular moral, political, or religious imaginary (Mauss [1923–24] 2016; Hart and Ortiz 2014; Sahlins 2013). This insight was central in Karl Polanyi’s analysis of the political process establishing the “market” as an institution that would be separated from other social institutions ([1944] 2001). Michel Foucault showed how the theoretical formalization of this process by ordo-liberalism attempted thus to separate the “economic” from the “political,” constituting the “market” as an institution with a technical character that would guarantee a distribution of resources, the justice of which would be politically neutral, and therefore politically undisputable (2004). Within this theoretical orientation—central in neoclassic economics and in financial regulation worldwide—money is considered as a technical medium that allows for exchanges in a “real economy,” of which it is not a part. Jane Guyer (2016) shows, on the contrary, how the term real economy is mobilized with different meanings, reactivating certain “legacies,” which must be understood as part of a political configuration, where the term plays particular roles in relations of forces. Economy can therefore be a slippery analytic concept, especially when one is doing research on practices that actors and analysts readily define as “economic,” with all the potential of depoliticization this implies. To explore one of the ways in which this can be avoided, this essay proposes to consider global finance as an object of political anthropology.

In line with the Maussian insights highlighted above, this text considers that the meaning and uses of money are multiple, and relate to the social relations in which they take place (Dodd 2014; Guyer 2016; Hart 2000; Hart and Ortiz 2014; Maurer 2006; Zelizer 2009). This implies that money is defined by these social relations, but also contributes to define them in turn: gifts, debts, and expenses partially define kinship and friendship (Zelizer 2005); monetary policy contributes to define and legitimize a polity, its citizens and social hierarchies among them (Hart 1986; Hertz 1998; Neiburg 2006); indemnities imposed by the state against polluters shape conceptions of nature (Fourcade 2011); money rituals define the attributes of gods (Chu 2010); and consumption practices (Stark 2011) and budgetary disciplines (Zaloom 2016) can establish the standards of religious morality. Approaching these practices through this understanding of money allows for seeing how, as Mauss highlighted, different meanings and uses of money—which correspond to mutually constituted religious, political, and moral hierarchies established through the distribution of resources—can be combined in multiple ways, with conflicts, conversions, and the production of hybrid or new meanings in the process (Guyer 2004). Guyer (2016) has proposed to consider these sets of practices and meanings as a multiplicity of “repertoires” conforming “ecologies” navigated differently by different actors, in what are often (but not only) power relations (on this point see also Maurer 2015). I will use here the term imaginaries to talk about these repertoires, only to hint slightly more at their creative and labile character, as they can be vague, wavering, and not even recognized as changing by the actors themselves (de Certeau [1980] 1990).

This pragmatist approach (Maurer 2006) eschews the idea that money would be the representative of one particular form of practice or social relation, be it relations of production, as in the Marxian tradition, of exchange, as in the liberal tradition, or some universal moral idea, as proposed, differently, by Georg Simmel ([1900] 1978) and Mauss himself ([1923–24] 2016). In very different ways, all these approaches tend to stress what money “really” is, in a way that relates then to some definition of the “real economy.” In the anthropology of finance, this can lead to considering finance as “fiction” or to focus on the sole issues raised by these approaches, such as relations of production or matters of calculation, knowledge, and information. The danger in this move is that the distinction between the “real” and its “other” may obscure the social processes in the latter that are crucial for the former.

One of the seeming advantages of these approaches of money and finance from the point of view of a “real economy” is that they often imply a much broader conceptual frame, which also contains a series of concepts and narratives providing for a political critique of the social processes under study. Pragmatism does not grant a politics warranted on a single reality. Instead, the “political” aspect of finance proposed here is itself termed along some possible uses of money that may allow for addressing a limited series of concerns. As money is constitutive of imaginaries of gender, kinship, religion, citizenship, and entrepreneurial profits, among others, it is also fundamental in the production and transformation of the social hierarchies that make sense according to them. Analyzing the multiple meanings mobilized to make sense of transactions such as mergers and acquisitions allows for understanding how this distribution of resources does not belong uniquely to the constitution of financial social hierarchies, but also to the constitution of political and moral relations of forces that cannot be separated from the former. As a series of organizations that collect, produce, and distribute money on a global scale, the finance industry ranks activities according to multiple conditions, rights, and duties, allowing some of them to exist at the expense of others. Thus, it articulates relations of forces that contribute to the production and transformation of the multiple social hierarchies where money plays a constitutive role, on a global scale (Hart 2015; Ortiz 2015). This use of the category political connects, thus, with Georges Balandier’s definition of political institutions as those that organize relations of forces (1967), and Foucault’s analysis of power as the production of differences in the capacities to act (1975, 1976). The political anthropology of everyday financial practices proposed here consists in studying the multiple repertoires that contribute to the production of these social hierarchies.

The research presented in this article is based on ten months of participant observation with a team of consultants based in Shanghai, conducting mergers and acquisitions (M&A) between Western Europe and China, and about fifty interviews with financial professionals, mostly concerned with cross-border investment, in Beijing, Shanghai, and Hong Kong.1 Analyzing the way in which they channel money from a large corporation based in China to a medium-sized enterprise in Europe, through the purchase of one of its subsidiaries, this article highlights how the imaginaries of profit mobilized in the negotiations, calculations, and establishment of rights and duties in the deal were actually multiple, and how they also combined with different imaginaries of the state and cultural identity. These imaginaries, often vague, co-constitute each other, but can also be in conflict and disconnected. Thereby, this article shows not only that it is important to analyze financial calculation practices within other social processes—in particular personal professional and nonprofessional trajectories, organizational issues, legal issues, stately and macroeconomic concerns, and imaginaries of the global (Montagne and Ortiz 2013)—but also that the imaginaries about “profits” are co-constituted with those about “states” and “culture,” in ways that cannot be disentangled in everyday practice. Doing so, the article shows the fruitfulness of the pragmatist approaches of money outlined above to understand the practices and meanings whereby money is distributed around the world through these particular operations. The social hierarchies established through these exchanges make sense in terms of “states,” “culture,” and “profits,” the limited possibilities of which are combined and transformed through the everyday practices described here. The analysis of these practices thus allows for locating the politics of distribution within these multiple imaginaries, instead of limiting it to problematizations in terms of the “economy.”

The article will first show the multiple imaginaries of “profit” that were mobilized by the people observed, as they conducted a transaction that lasted more than two years. I will then analyze the importance, in the process, of imaginaries of “states” and “cultures.” In the conclusion, I will come back to the complex relations between these imaginaries, and the question that they raise for a critical and reflexive pragmatist approach of finance as an object of political anthropology.

Imaginaries of profit

The jobs and income of Merge Consulting employees and owners depended on their capacity to attract clients whose service fees comprised the company’s yearly sales of about 3 million euros. These fees came from different companies for different activities, and were distributed within Merge Consulting according to professional standards that comprise relations of collaboration, conflict, and hierarchy between people and between organizations. In professional finance, monetary gains can have multiple moral and political meanings, linked to the presuppositions embedded in the formulas and procedures (Maurer 2002; Muniesa et al. 2017; Ouroussoff 2010; Ortiz 2014a; Zaloom 2006) to organizational rules (Arjaliès et al. 2017; Godechot 2016; Ho 2009; Ortiz 2014b; Zaloom 2006), and to the macroeconomic and political context in which they operate (Hart and Ortiz 2014; Ho 2009; LiPuma and Lee 2004; Montagne and Ortiz 2013). In the case of activities such as those of Merge Consulting, “profits” meant different things, within several imaginaries about personal trajectories, organizational power relations, notions of entrepreneurship, and circuits of debt and credit with multiple more or less defined rights and duties and the possibilities to circumvent them, as they were claimed in conflicting ways by various stakeholders. I will present a transaction whereby a large company based in China purchased a small company based in Western Europe,2 because it will allow us to see how these multiple imaginaries could be combined, opposed, or unrelated, as they were produced in particular situations.

Merge Consulting was composed of ten people. Four associates (who owned the company) and four employees were based in a mid-sized town in Western Europe, Villagiund, while two employees were based in Shanghai. The main source of income of the company came from its services as consultant in mergers and acquisitions. The client, a potential purchaser or seller, would pay Merge Consulting to find a counterparty in the transaction, and to assist at all the stages of the negotiation until the closing of the deal. In accordance with professional standards, clients paid “operating fees” upon completion of intermediate tasks, such as finding and establishing relations with potential counterparties and negotiating the price and the conditions of the purchase—for instance, in terms of the rights and liabilities of former owners or of potentially remaining management. These tasks could take between several weeks and more than a year and, according to the opinion of many interviewees in the profession and of Merge Consulting’s members, usually less than half of the transactions that were started did reach completion. Once the transaction was concluded, Merge Consulting would be paid a success fee, potentially much bigger than the operating fees, of between 3 percent and 5 percent of the amount of the transaction. While operating fees usually were around 100,000 euros, distributed over a long period of time, the sale or purchase of a company valued at 10 million euros would imply payment of a success fee between 300,000 and 500,000 euros in one installment. This impacted the bonus distributed hierarchically within Merge Consulting, where the yearly salaries of financial analysts and the representatives of the company in Shanghai were between 40,000 to 60,000 euros and those of associates around 100,000 euros.

The company was established in the late 2000s in Europe, where it conducted most of its activities. In 2012, in order to develop its operations in China, the company hired Peter, in his late thirties, who had arrived to Shanghai from Europe two years earlier. When Peter decided to leave the company in 2015, I replaced him partially—as an external consultant in Shanghai—for ten months. During that period, one of my tasks was to assist in the purchase of one of Merge Consulting’s clients, Bolbus, a small company producing medical molecules and devices based in Western Europe, by Alpha, a large company based in China, producing chemical and medical products. The transaction was eventually completed at a price of 15 million euros, which were paid to Bolbus’ mother company, Calcus. This transaction allows for seeing how the members of Merge Consulting and the owners and representatives of these companies mobilized different imaginaries of profit.

The interactions between the members of Merge Consulting based in Europe and those in Shanghai were made of a daily stream of emails and regular conference calls, which happened at least once a week, and sometimes more, in particular when transactions reached moments that were considered to be crucial. The members based in Europe also came to Shanghai at least once a year, and, at the time of my observations, a trip to Europe was being planned for Vicky, who was previously Peter’s assistant and who replaced him as head of the Shanghai office after his departure. In these exchanges, there were moments of misunderstanding that allowed for margins of play and clarifications that shifted the terms of the relations. But concerning the transaction, there was a clear agreement among all the members that they wanted the deal to be completed as soon as possible. All operating fees had already been paid the previous year, and any action by Merge Consulting on this project would only be funded in the event of a success fee. This would also be the first deal concluded with a Chinese company, and it could be used in marketing material to expand business. Merge Consulting had explored several potential buyers, and reached the final stage of the exploration with two of them. This meant the signing of confidentiality agreements between the potential buyer and the seller, so that the latter would disclose information deemed sensitive and confidential about its operations. Before the final negotiations that could ensue in the agreement of the price and conditions of purchase, the professional norm was that the representatives of the companies would meet personally. Just before the summer of 2015, the owners of Calcus and Mr. Hecks, head of Bolbus, came to Shanghai to meet the representatives of two potential buyers. While the way fee payments are organized presupposes that they “align the interests” of the consultancy with those of its clients, once the last stage is reached this turns into an explicit tension. The owners of Calcus did not want to sell Bolbus at just any price and under any condition, and although they wanted the transaction to take place, they preferred to go slower. The two days spent in Shanghai by Merge Consulting’s clients were thus marked by a tension not only between the representatives of the buying and selling companies but also between Merge Consulting and its client.

The morning of the meeting, Vicky, Peter, and I met two owners of Calcus and Mr. Hecks in their hotel, and took them to the headquarters of Alpha, one of the two potential buyers, situated in an industrial park on the outskirts of the city. The first three hours involved an exchange between the representatives of the companies, mediated by Merge Consulting, followed by a lunch and a visit to Alpha’s premises. At the negotiation table with representatives of Alpha, the owner of Bolbus who conducted the talk insisted on the idea that theirs was a family business; for the owners it was important to ensure that the sale of Bolbus would not create a difficulty for its employees and management, for whom they cared personally. They explained that the head of Bolbus, Mr. Hecks, had worked in the company for decades, and was practically part of the family. The presentation then shifted from the insistence on the morality of family entrepreneurship to presenting a particular arrangement for the deal. Mr. Hecks had worked in China for the last thirty years, and had established other companies there, some that were unrelated to Bolbus and some that had direct dealings with it. Calcus’ proposal was that after the sale to Alpha, Mr. Hecks would continue to be the head of Bolbus, and that his own companies would still benefit from the contracts with it. Mr. Hecks then explained at length that the sale would help him to “spend more time in China”—in particular, to continue developing his personal businesses there, with and without Bolbus. He conducted most of the discussions with the representatives of Alpha concerning the qualities of Bolbus, staging the figure of an independent businessman with whom it was profitable to deal, not the least because he would remain a partner in the long term (as he was relocating to China). Alpha was listed in a Chinese stock exchange, and the negotiations were conducted in the presence of its management, composed of engineers, and of representatives of its main shareholder, Monatu, an investment fund based in another Asian jurisdiction. While the engineers mobilized arguments concerning the need to verify how compatible the technologies of the two companies were, implying that if they weren’t, more investment was needed, and therefore the price of Bolbus should be lowered, the representatives of Monatu were concerned about the timing of the operation in relation to evolutions in the stock market. The announcement to the financial analysts that Alpha was upgrading its technology by purchasing top-of-the-line technology from Europe would boost Alpha’s stock price, as long as the purchase could be presented as cheap enough. After all parties acknowledged that they considered the proposal by Calcus to be potentially acceptable, the lunch was spent talking about life in Shanghai and generalities, and the afternoon centered on technicalities of the medical devices.

The different meanings of the deal, staged at the negotiation table, were further explored in conference calls and exchanges of emails and documents. These meanings were partly connected to the attempt by all parties either to sell at a high price or to buy at a low one. But some arguments carried more weight than others or served different purposes. Calcus’ management insisted that the sale was due to “purely industrial reasons,” meaning that they considered that Bolbus was a very promising company; they were not selling it because it had no financial value but because operations needed further investment to profit from their potential expansion in China, and that this was too far from Calcus’ “core business.” The talk of a family company only enhanced their argument that they would have preferred not to get rid of a technologically advanced asset. The responses from Alpha’s representatives were ambiguous on this point. Insisting on the need to assess the technology was aimed at opening the door for a lower price. At the same time, the price proposed by Merge Consulting, 15 million euros, was acceptable due to differences in the methods of valuation for acquisition of a company.

As I heard many times in interviews with professionals of cross-border investment (Ortiz 2017), the mainstream methods of valuations are the same in China and in Europe and the United States, with the exception of one. In Europe and the United States3 a company would be evaluated by assessing the price of each of its assets, by comparing it to similar companies, and by calculating the potential cash flows that could be obtained in the future, discounted at a required rate of return. According to most interviewees, this last method is much less prevalent in transactions in China. These methods have moral and political meanings. The method of “discounted cash flows” is usually termed a “fundamental valuation,” concerned with long-term ownership of the company, and it is intimately related to the idea that if “investors” search for all available information, in “efficient markets,” this information will be “reflected” in the price, which will then serve as a signal contributing to a socially optimal allocation of resources (Doganova 2014). Valuing the company by its assets, or by comparing it to other listed companies, implies something closer to a “speculative valuation,” with its “bubbles” and “crashes,” where the aim may not be to profit from the company in the long run, but to sell it whenever market prices go up (De Goede 2005; Hertz 2000; LiPuma and Lee 2004; MacKenzie 2006; Muniesa 2007; Ortiz 2014b).

According to several interviewees, one of the practical problems posed by this difference in the methods of valuation is that when the parties disagree on the price, they may also disagree on what the object of the transaction is. In the current case, this difference had the opposite result. Using the discounted cash flows method, Merge Consulting’s analysts considered that Calcus could gain 15 million euros by keeping Bolbus in operation. This price was lower than the stock price of comparable companies listed in China, taken as a standard of valuation by financial analysts of Monatu, and potentially by brokerage companies who would report on the deal. The purchase would be considered a bargain, and push up the price of Alpha’s stock, and therefore the monetary value of Monatu’s portfolio. The associates of Merge Consulting, connecting the technical and political elements of financial valuation, commented that the deal was therefore benefiting from this mismatch in valuation methods and from the inefficiency of the “stock market bubble” in China.

The meanings of the 15 million euros paid by Alpha for Bolbus were therefore multiple. Some referred to different techniques of financial valuation, themselves predicated on different definitions of what a company is as financial investment and its relation to the technical and political meanings of market efficiency. But the money, considered a profitable transfer for all parties, was also supposed to make sense as part of a personal entrepreneurial project, as the “best industrial solution” for the development of an activity irrespective of its owners, or on the contrary, as the painful disposal of a family jewel, marked by employers’ paternalistic moral responsibility toward employees. From the point of view of Merge Consulting, these different imaginaries were rendered compatible, in the deal, with the strategies of the associates to obtain a success fee and to expand their prestige and business in China. For employees like Vicky, the company’s representative in Shanghai, this meant the potential upgrade of her position in the company, with the prospect, evoked by the associates, that she could herself become an associate in the future. These multiple imaginaries became more or less compatible or even mingled into one, depending on the situation, and their similarities, disconnections, and contradictions were used to articulate and defuse conflicts around price, rights, and duties in the transaction. Mobilized to strengthen or explore positions during the negotiation, their potential contradictions did not need to be explored further by the people involved as the transaction approached completion and tensions diffused. With technical, moral, and political aspects, they composed a complex set of possibilities, which marked the paths through which the actors concluded the transaction and went on with their lives. These imaginaries were inextricably linked to imaginaries of the state.

Imaginaries of the state

Merge Consulting’s practices implied mobilizing imaginaries of the state that usually related in multiples ways to a broad understanding of a relative position between a rising Chinese economic power, where the state had played a central role in economic policy and wealth accumulation for forty years, and a decline in the places most affected by the financial turmoil that started in 2007–8, in particular the United States and Western Europe (Ortiz 2017). Yet these imaginaries did not conflate into one but were, on the contrary, sometimes disconnected and sometimes in contradiction with each other. Merge Consulting was itself partly an actor of different states that paid for its services. Its associates understood their commercial strategy as benefiting from—and supporting—certain macroeconomic policies in China, with their narratives of nation building, socialism, and sustainable development. And the legal frameworks that were crossed by the transactions implied detailed strategies to avoid or profit from their provisions. In all these cases, the state was mobilized, among others, as a potentially mighty force orienting macroeconomic policy, as a series of unrelated entities, and in China, as an organization with a complex link to the Communist Party. It is therefore important to understand how the state is itself produced from its margins by actors who imply its existence, and who are officially not part of state bureaucracy (Abélès [1990] 2005; Das and Poole 2004). These imaginaries, in turn, must be understood in the case presented here as they were co-constituted with the imaginaries of profit described above.

Merge Consulting did not provide regulated legal services for its clients. Nevertheless, its associates, with decades of experience in M&A, did scrutinize closely each clause of the contracts that were signed between the parties of the transaction at each step of the process and when the final sale occurred. Thereby, the company’s activities were constantly gauged against the regulatory frameworks that were brought together by the transactions. These frameworks could be perceived in terms of benefits—for instance, when it was considered that the contract should explicitly be covered by European laws because judges were supposed to be more independent of other state actors in Europe than in mainland China, or in terms of constraints that should be avoided—for instance, when establishing companies in Hong Kong to avoid certain tax requirements in Europe and China. This understanding of state regulation, which could be assessed and calibrated in detail in certain moments of the transactions, cohabitated with the fact that Merge Consulting sold its services to the municipality of Villagiund, where it was located, and to the municipality of a mid-sized Chinese town, Zhongzhen, in order to help them enhance the commercial relations between the companies operating in the territory under their jurisdictions.4 This meant interpreting the political tensions within each municipality and the career prospects of the municipal teams. While municipal officials in Villagiund would use increased activity with China as an argument in electoral contests, for municipal officials in Zhongzhen, these activities responded to the central government’s injunction to increase in GDP and internationalization, and could therefore help their career advancement within the Communist Party, and hence, within the state administration. These municipalities were not just clients paying fees but also facilitators, as they opened their contacts to Merge Consulting—for instance, when the consultants were looking for potential clients in Europe and buyers in China. Thus, just as the sale of Bolbus was being negotiated, Merge Consulting was working on another project, aiming to create a joint venture between a small company based in Europe and a state-owned company in China. This deal, which ultimately did not reach completion, was being brokered by the municipality of Zhongzhen, in whose industrial park the joint venture would be located, benefiting from tax rebates.

The transaction around Bolbus also activated another important imaginary of the state. The company produced avowedly high-tech molecules and devices that could be used in medical treatment. All the participants evoked as an evidence that this purchase, and the potential growth of Bolbus in China, was predicated on the hopes of success of the Chinese government’s official project to reorient the economy from exports toward internal consumption, where middle-class consumption would take a leading role, in particular that of an aging and wealthier urban population. Investment was therefore supposed to go to sectors such as health, education, and environmental protection and away from heavy manufacturing or luxury, the latter being under attack by central government discourse as oiling the gift-giving circuits of state officials’ corruption. Benefiting from the sale of Bolbus, for the members of Merge Consulting, thus implied navigating and trying to leverage the multiple facets of legislation, understanding and taking part in local-level politics in case they could be helpful if the transaction stalled, and participating in the application of government policy, within the understanding that the Chinese state indeed had the capacity to transform what was thereby supposed to be a malleable economic structure. This latter point contrasted with the assessment Merge Consulting’s associates made of states in Europe, against which they held an explicitly “conservative” view that demanded less state participation in economic life.

These imaginaries combined with others where the power of the Chinese state was seen as a danger due to corruption and the weakness of the rule of law. On the same trip in which Mr. Hecks and the owners of Calcus met with the representatives of Alpha and started exploring the concrete modalities of the transaction, Merge Consulting had arranged a meeting with a representative of one of the largest state-owned investment funds, which was introducing as potential buyer the owner of a company of which the fund was an important shareholder. Contrary to his attitude in front of the representatives of Monatu, Mr. Hecks was extremely evasive, and did not disclose the fact that he owned a company that sold high-tech components to Bolbus. After the meeting, once we were back at the hotel, he explained to us that he did not want to deal with companies owned by the Chinese state. According to him, in that case, not only would it be very hard to negotiate the price and especially his right to stay in the company, but there was even the risk that the counterparty would send spies to copy the technology that he himself was producing in China and selling to Bolbus. This would make him lose the chance to expand his own business after the sale and, he claimed—following a narrative line that I had heard with many other professionals working in mergers and acquisitions and joint ventures between state-owned and foreign-owned companies—there would be no legal protection against this theft of intellectual property, as Chinese judges would not enforce the law against a state-owned company.

These imaginaries became further complicated by the events in stock markets in 2015. After a steady rise since the beginning of 2014, the summer of 2015 saw the collapse of most stock prices. According to the technical and political imaginaries of market efficiency described above, “markets” were “correcting a bubble,” where prices had veered too far away from fundamental valuation. Members of Merge Consulting understood it thus as a “necessary” correction but also one that put the transaction of Bolbus at risk. If prices fell too low, the company, priced at 15 million euros, would start to look too expensive in relation to comparable companies listed in the stock markets of China. Monatu would then be unable to justify the purchase as a “good deal,” and would either have to propose a lower price or put the transaction on hold, waiting for a new hike in prices. These fears were calmed by the intervention of the Chinese central government. Considering that the collapse of prices was dangerously hitting middle-class savings, the government used the rhetoric of market efficiency to claim that the fall was excessive in relation to fundamentals, and detrimental to a smooth economic life. A dedicated fund of 200 billion USD, dubbed the “national team,” was used to purchase stocks across the board, from most of the companies whose prices were falling. Intervening with media discourses and actual purchases, this strategy had the result of stemming the collapse and giving the fund 6 percent ownership of the whole market.5 Even if prices did not recover their levels of the beginning of the summer of 2015, they remained well above prices of the beginning of 2014, which allowed for a narrative of slow growth spurred by the government’s protection against excessive volatility that did not respect the fundamentals. In informal conversations, Merge Consulting’s associates wavered between the relief that the transaction could go on, reproving state intervention, and justifying it as a way to sustain market efficiency against speculation.

This state presence in the deal’s valuation issues only rendered more complex the team’s imaginaries about the state’s role in the transaction. In the last stage of the transaction, the approval of the Ministry of Commerce was needed before payment money could be transferred. This added a few weeks to the conclusion of the deal, which the owners of Bolbus and the members of Merge Consulting had not considered. Fearing that any delay could derail the deal, they pressed the counterparty to speed up the process. In a conference call with Vicky and me, where we told the associates of Merge Consulting that representatives of Alpha communicated that it was a bureaucratic procedure that they could do nothing about—even in the case the Ministry’s officials would refuse the deal—one of the associates, Jack, started to shout that such an answer was “unacceptable.” He went on to explain that now that the state had invested in Alpha, the latter was part of “the system,” and should be able to mobilize its newly acquired connections within the Communist Party to make the administration go faster and in the right direction. State participation in stock market valuation was thus translated into the capacity to bypass bureaucratic processes in order to secure profits by guaranteeing the completion of the transaction.

Merge Consulting’s activities were carried out by mobilizing different imaginaries of the state that were more or less compatible, conflictive, or independent from each other. These imaginaries were co-constitutive of the imaginaries of profit. Valuation techniques, or the rights to set up a company and to expand its business, made sense in relation to certain understanding of the state, the legal framework, and the local politics of where profits could be made. Further, an investment project that aligned with the macroeconomic project of Chinese central government mobilized images of a state trusted for its capacity to steer the economy, an imaginary with ambivalences as to where political legitimacy lied, and which contradicted other imaginaries about European states’ impact on profits. The technical, moral, and political aspects of valuation, entrepreneurship, and investment were inextricably linked to also technical, moral, and political imaginaries about states’ multiple facets. Thus, “states” and “profits” were constituted as practical categories and concerns that were both different and partly defined by each other. These imaginaries were also co-constituted with imaginaries of “cultures.”

Imaginaries of culture

The relations between the professional and nonprofessional, often termed “personal” lives in finance, are marked by the fact that certain social identities play a strong role in both domains, notably age (Ortiz 2014b; Zaloom 2006), social class (Godechot 2001), race (Ho 2009), and gender (Fisher 2012; Ho 2009; Roth 2006; Zaloom 2006), while the imaginaries of professional practice may at the same time silence or even oppose this. The “cross-border” character of the transactions in which the members of Merge Consulting took part was partly problematized as the crossing of a divide between what were loosely designated as two “cultures” or “mentalities,” among other expressions: China, on the one hand, and the West or Europe, on the other hand. The meanings of these entities were multiple, and they were mobilized in often labile and contradictory ways. Yet, these imaginaries of culture played crucial roles in certain situations, articulating and diffusing conflicts, establishing common narratives to continue the transactions, and providing meanings and practices that were developed, feared, enjoyed, or accepted, among other emotional possibilities, in everyday professional and nonprofessional lives (Ong 1999). It is important, therefore, not to consider “culture,” “China,” or “the West” as our own analytic categories but to see how they are produced in everyday practice (Anderson [1983] 2006; Gupta and Ferguson 1992; Pieke 2014; Trouillot 2003). This will allow for understanding how these imaginaries of “culture” are mutually constituted with those described above, concerning “profits” and “states.”

In interviews with financial professionals working on cross-border investment, three main narratives tended to be mobilized when articulating a difference between China and the West, Europe and the United States, or “the rest of the world,” which could also be found in media and state-backed official reports (Ortiz 2017). They mobilized concerns about financial techniques, political organization, and personal trajectories of the participants. One imaginary built these entities as bound to become undifferentiated, either because China would become like the West, or because the opposite would happen. Another narrative considered that these entities were bound to enter into a violent conflict, since their differences were irreducible. A third narrative used words such as hybrid or mixture, developing the idea that something new was being produced, which took elements from both entities and put them together in a way that neither of them presented before. Merge Consulting’s members tended to mobilize the third narrative the most. They insisted both on some unavoidable character of the differences between China and the West, and on the idea that these differences could be bridged by specialists like them.

In one of the associates’ visits to Shanghai, as they were celebrating the fact that the sale of Bolbus had been completed, John, one of the founding associates of Merge Consulting, told to me as a justification that it was after an experience where “misunderstandings” had jeopardized a deal in China that he “realized” that it was only by “being there” that business was viable: only by having Chinese employees who lived in China could the company create a common understanding between parties in China and Europe and achieve transactions. This was also the company’s marketing line to its potential customers in Europe. Many interviewees in the profession problematized the valuation differences described above in terms of “cultural differences.” Although Merge Consulting’s members, during my observations, did look for clarification concerning valuation differences, just like the other professionals I observed, and echoing an important production of manuals in cross-cultural management, they put forward “communication,” “understanding,” and “learning” between “cultures” as a central component of the company’s activities.

I joined the company in replacement of Peter, who had lived in China for five years and had developed the Shanghai section of Merge Consulting in the last three years. We had first met for an interview and had maintained regular contact until he informed me that he was going back to Europe and could propose to the company that I replace him temporarily, given my research interests. He explained that my presence would be needed because “in some meetings, they just want to see an older white guy,” a role that Vicky—“Chinese” and in her early 30s—could not fulfill. He considered that this was also necessary because counterparties are “usually older Chinese men, and they tend to not respect Vicky, because she is a woman and she is too young.” In his narrative, these elements came together with other ones composing a distinctive “Chinese culture”: “Sometimes it is really surprising that they really don’t understand the simplest things. Vicky is very smart, but sometimes she just does not get it. I had many times the same problems with counterparts here. You send them the draft of the contract, it is crystal clear, and yet they ask you the most stupid question about how to interpret it.” He would then give examples of deadlines that would not be understood to be strict, or guarantee clauses that would be doubted and needed explanation or rewriting.

These imaginaries of culture allowed for articulating conflicts with clients, as in the case presented by Peter, when a discussion and eventual resolution of the interpretation of a clause was not termed as an opposition of interests but as a “cultural misunderstanding.” It also articulated, as evoked by Peter, relations within Merge Consulting. When Peter left, Vicky came to occupy a stronger position in the company, as head of the China office. Feeling that the arrival of an external consultant like me could threaten this, she initially insisted that I did not need to come to the office and that there was no need that I have access to the contracts that had been signed by clients with whom the company was still conducting operations. Her refusal to allow me to access the basic information I needed to work as a consultant for the company, and the insistence of the associates in emails and telephone conversations with me that I take a more active role in the company’s daily operations, led to clarifying each other’s positions in a conference call a few weeks after my arrival. The tense conversation found a point of compromise, when the associates insisted on the fact that Vicky would manage the office but that I would assist her in financial matters, on which I had a formal education that she did not have, and which was sometimes demanded by clients in Europe as part of the resources present in Shanghai. After this conversation, she stated her position, as a summary of the exchanges, in a long email, where she explained that I would only bring my expertise in financial technical matters, and that her role was centered on “cultural communication.” She explained that Chinese counterparts did not understand the “European way to do business,” and that they did not trust “Europeans” but would only express “what they think” “in Chinese” and “to a Chinese person.” At the same time, in her narrative, Western counterparts, and even the members of Merge Consulting, did not know the “political situation in China” well enough to understand the reactions, fears, and expectations of Chinese counterparts. Her role in the company was therefore crucial. This email received the approval of the associates and my own, as a sort of chart of principles that would allow to clarify any potential conflict in the future, which eventually never occurred.

What is interesting about these mobilization of different elements around the idea of Chinese and Western “cultures” that needed knowledge and understanding was that it was explicitly accepted and found legitimate by the other members of the company, and that it combined, in a way that was specific to the situation, imaginaries of culture that could be found in other interviews and media or official reports. The assertion of Jack, Merge Consulting’s associate, concerning Alpha’s capacity to mobilize supposedly newly acquired connections in the Ministry of Commerce because the “national team” investment fund had acquired a share of its stocks was one of these instances. After the talk, as she understood that I was aware that this interpretation did not correspond in any way to Alpha’s situation, Vicky explained, echoing John’s own comments quoted above, that this was just an example of Merge Consulting associates’ ignorance concerning China, and their need of a Chinese person to deal with clients and operations in the country. The formulation of misunderstandings and hierarchical conflicts within the company and between the company and its commercial partners could therefore be formalized in terms of “cultural” differences, in ways that reshaped the meaning of these relations, establishing specific possibilities and limitations.

These “cultural” entities were part of both professional and nonprofessional lives. This could concern attempts to understand the moral or political tensions that Merge Consulting’s transactions were supposed to bridge by crossing the border. John, Merge Consulting’s associate quoted above, combined European nationalism with and admiration for Chinese governmental policies. He explained that he did not want to live in China because he was “too old” and it was not “a place to raise your children,” given pollution and the cost of a “good, quality education.” In our first meeting, he expanded on how much Europe was “suffering” from the influx of immigrants. Conveying an avowedly conservative political view, he considered that the continent needed to start closing its borders in order to retain its social stability. He asserted that terrorist attacks were due to this European “openness,” and that China could provide an alternative perspective, in particular with the way in which it dealt with what John considered to be Islamic terrorists, echoing the official discourse of the Chinese central government about the bloody attacks attributed to Uighur separatism. Considering that China needed European technology, he said that Europe could learn from China’s political system. In his visit to Shanghai, remarking that all bags were screened in the access to subways, he said: “maybe Europe could learn from China, after the terrorist attacks, and stop refraining from taking some measures in the name of the respect of individual liberties.”

But the mobilization of imaginaries about culture could also articulate life and career trajectories. After five years in China, Peter told me that he was tired of being an expatriate, that he could barely connect with “other expats,” who were too focused on “business alone,” and that he felt “totally shut off ” from becoming friends with Chinese people, due to language barriers but also—more importantly—to “cultural differences.” He had a new job as a consultant for a large Chinese company, for which he would work while living in Europe, to contribute to its expansion through mergers and acquisition and business development there. He explained that this was part of a longer term project, in which he wanted to develop a consultancy on “intercultural relations in business,” connecting Europe and China, based on the experience he had accumulated during the five years he lived in Shanghai and after that. Vicky, in turn, explained that she would want to continue working for Merge Consulting and become an associate in the company. She explained that she could earn more money in a Chinese company, but that she was not interested in doing this because it was an environment that was much more hierarchical and where there were not many career prospects for someone who, like her, lacked political connections and an elite education. While she expressed her strong desire to travel to Europe and to acquire European luxury items, she explained that she would never want to live outside China, where she liked her life, was planning to build a family, and could enjoy closeness to her parents and friends. This was exemplified by the way in which she could use her Chinese name with Chinese counterparts, and her English name with non-Chinese ones. This practice was widespread in the profession and elsewhere where Chinese nationals worked with foreign companies, and it was common with many employees of Chinese companies that dealt with Merge Consulting. “Europe” and “China” were thus defined in multiple, vague ways that could be combined to make sense of the everyday professional and nonprofessional life of the people conducting Merge Consulting’s activities.

Merge Consulting’s activities mobilized several imaginaries of culture, China, and the West that gave meaning to the commercial strategy of the company, to conflicts and agreements between employees and between companies, and to life trajectories inside and outside the realms of professional practice. They concerned feelings of belonging, of trust and mistrust, differentiations between groups of people that could be recognized, as business partners and employees, and of imagined communities that connected with national identities and geographical borders and locations. These imaginaries were partly constituted by imaginaries about profits, concerning methods of valuation, of organizing companies, of negotiating contracts as a well as imaginaries about states, concerning citizenship, legal frameworks, the Communist Party, and imaginaries about the global, defined partly in terms of financial methodologies that could converge, clash, or be combined, but also in terms of geopolitical tensions, of “migration” and “terrorism.” Thus, the production of culture as an entity that was supposed to give meaning to everyday practice was partly determined by imaginaries about financial rules and about states, and provided in turn some of the elements to make sense of the latter. These imaginaries contain technical, moral, and political aspects, they are labile, sometimes contradictory, and can be transformed within limits that are explored in particular situations but that connect with shared understandings and practices that never coalesce into a single narrative. This co-constitutive character of imaginaries of profits, states, and cultures allow for a questioning of the “economy” in the narratives of “real economy.”


This essay has shown how, in the everyday practice of people engaging in cross-border investment, the categories of profit, states, and cultures have multiple meanings, which are mobilized to make sense of practices in ways that can be contradictory, vague, and disconnected, but that also make them co-constitutive of each other. Profits are understood within multiple temporalities and moralities, such as those of a life-long entrepreneurial career, the fast-paced movement of stock market prices, or the years-long development of Merge Consulting’s operation. The meanings of owning a company and exchanging it for money vary accordingly. These meanings are co-constituted with those of states, which can be imagined as mighty actors capable of shaping the content and use of the law as well as the economic structure and particular transaction, but are also considered as commercial partners or legal frames that allow for manipulation and negotiation and as entities that can be themselves objects of investment. The political legitimacies of the Communist Party and the European project—when impacting stock prices through purchases by a “national team” or issuing licenses for deals that correspond to macroeconomic policy objectives—are part of the notions of market efficiency central in calculations and in justifications of prices, and play a central role in the design of long-term projects of business development in China and Europe by Merge Consulting, and its clients and counterparts in the transactions. Finally, the spaces designated as China and Europe, and practices and imaginaries related to them, are conflated into more or less homogenized “cultural” entities, used as causal explanations in everyday interactions, but also central for the stabilization of the meaning of professional rules, career perspectives, and identities. In everyday practices, these imaginaries are co-constitutive in ways that may not allow for disentangling them. They make sense in connection to each other, even when they contradict each other, in particular situations, such as in the discourse of a same person in a same interview, or in different moments and by different people participating in the same transaction over a period of time that can last years. Their analysis here shows how this co-constitution implies that the social hierarchies established through the distribution of monetary resources, like the one effected through the purchase of Bolbus, are not uniquely “economic” but they relate to multiples meanings of “profits” that must be understood as part of legitimations also problematized in terms of states and cultural identities.

The political character of the distribution of resources becomes therefore more complex than what an analytical distinction between real value and fiction or between the real economy and money can allow to observe. These dichotomies obscure the processes under observation more than they help clarifying them. The practices of professionals like those of Merge Consulting contribute to channel money to particular activities at the expense of others, participating in the constitution of global hierarchies in the access to money articulated by the financial industry. These hierarchies cannot be understood if we only try to see them as “economic”—for instance, by focusing the analysis solely on how they relate to coordination through the production of information and knowledge or to a distinction between fiction and production. The imaginaries of profits, states, and culture described here mark a series of paths that are navigated, mobilized, and produced by financial professionals, but also in many state-backed official reports and discourses and financial and nonfinancial media, in order to organize, describe, and legitimize this particular distribution of resources. According to these imaginaries, contributing to the distribution of 15 million euros from a major chemical corporation based in Chinese territory to acquire the rights to expand the operations of a small company based in Europe and specializing in medical devices could be seen as a way to speculate in the stock markets, to enhance one’s career, to develop an industrial project, to contribute to the reordering of social relations by the central government under the control of the Chinese Communist Party, and to bring together the cultures of China and the West, among others.

Stressing social processes that would refer to a particular disciplinary niche that connected more or less loosely with the way the people observed made sense of the situation—for instance, saying it is mainly a “cultural,” a “stately,” or an “economic” process—would mean risking to miss important parts of the social process itself, and also risking to reproduce some of the legitimizing narratives that the actors themselves put forth to make sense of the distributive effects of their practices. Thus, the practices described above allow for seeing that the notions of profit, states, and cultures, and those connected to them, such as investor, market, law, corruption, China, and the West, must be considered in the way in which they are used and produced, instead of being used as readily available analytic categories. The pragmatist definition of the political anthropology proposed here, following the practices of money production, collection, and distribution, with all the imaginaries they involve, allows for broadening the critical gaze to all the imaginaries mobilized to legitimize and reproduce these global hierarchies. Interdisciplinary dialogue is necessary to understand the imaginaries and social organizations whereby money is produced and used elsewhere than in the settings observed in particular fieldworks, making global social hierarchies possible. In this way, without claiming a grounding on a “real economy,” a pragmatist approach of money can also open doors to explore the multiple places where global monetary distribution could be imagined to be different.

The author wishes to thank the editor and the anonymous reviewers of the journal and the coeditors of the special section, Jane Guyer and Federico Neiburg, for their extremely useful critiques, comments, and suggestions. This essay also benefited from exchanges with Maxim Bolt, Kimberly Chong, Lily Chumley, Liliana Doganova, Keith Hart, Deborah James, Shao Jing, Jeanne Lazarus, Benoît de L’Estoile, Mariana Luzzi, Sabine Montagne, Fabian Muniesa, Gustavo Onto, Alvaro Pina-Stranger, Fernando Rabossi, Alexandre Roig, Wang Mengqi, Ariel Wilkis, Caitlin Zaloom, and Zhu Yujing.


1. Previous research was conducted with stockbrokers and fund managers in New York and Paris between 2002 and 2005, and in business schools in Paris and Shanghai between 2008 and 2014. In agreement with the people I observed, and to respect their anonymity, all names have been changed.

2. In what follows, when I use the terms China and Western Europe without brackets, I refer to the territories.

3. But not exclusively.

4. The names of these two cities have been changed to preserve the anonymity of the people observed.

5. Many of the companies listed in the Shanghai Stock Exchange were already, in one way or another, state-owned or state-controlled.


Horacio Ortiz is associate professor of the Research Institute of Anthropology, East China Normal University, and researcher at Université Paris-Dauphine, PSL Research University, CNRS, IRISSO. He graduated from Sciences Po, Paris, obtained an MA in philosophy from the New School for Social Research, New York, and a PhD in social anthropology from the Ecole de hautes études en sciences sociales, Paris. His research focuses on the global financial industry from a perspective of political anthropology. He is the author of Valeur financière et vérité: Enquête d’anthropologie politique sur l’évaluation des entreprises cotées en bourse (Presses de Sciences Po, 2014).

Horacio Ortiz

Research Institute of Anthropology East China Normal University
500, Dongchuan Road, 200241 Shanghai