Title

Gangs in the markets : network-based cognition in China's futures industry

Document Type

Journal article

Source Publication

International Journal of China Studies

Publication Date

10-1-2010

Volume

1

Issue

2

First Page

371

Last Page

389

Keywords

commodity futures, gangs, proximity cliques, corner, capital factions, China

Abstract

Gangs in traditional Chinese society often arise from the lower social strata, where wealth, social status and kinship are inadequate to protect people from hostile or adverse environments. It is intriguing that modern futures investors in China, as owners of capital, would form a social structure that partially resembles the marginal groups of society. This paper portrays different social connectivity within the investor community of China’s commodity futures markets, including organized battle team, proximity cliques, capital factions based on geographical or industrial affiliations, and charismatic leaders. It also explores how a capital faction’s leadership, origins of capital and geographical location helps to shape some of its investment style and risk-taking characteristics. Based on empirical ethnographic fieldwork in 2005 and documentary research on China’s futures markets, the author argues that the textbook definitions of “hedgers”, “speculators”, “rational individuals” and “price discovery” are far from adequate to represent China’s markets. In reality the markets are made up by flexible socioeconomic aggregates continually interacting with each other, whose characteristics are shaped by social connectivity and background affiliation. Price movements are a collective result of the purposeful actions of the market people themselves, not some latent information waiting to be “discovered” outside the human world.

Print ISSN

21803250

Publisher Statement

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Full-text Version

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Recommended Citation

Siu, L. S. L. (2010). Gangs in the markets: Network-based cognition in China's futures industry. International Journal of China Studies, 1(2), 371-389.