Doctor of Philosophy
School of Accounting and Finance
Zhang, Ying, Fair value accounting as an instrument of neoliberalism in China, Doctor of Philosophy thesis, School of Accounting and Finance, University of Wollongong, 2012. http://ro.uow.edu.au/theses/3499
The introduction of International Financial Reporting Standards (IFRS) has heralded a new „globalised‟ era of accounting practice. Although this has been celebrated by governments, standard setters, practitioners and reporters throughout the world as a great triumph, little is known about the underlying impacts of these standards on the political economies in which they operate. Given the transformative potentialities of IFRS in the context of globalised capitalism, this thesis explores accounting change in China. It focuses on both the context in which this change emerged and the impact it has had on the Chinese economy.
In addition to its empirical focus on China, IFRS and fair value accounting (FVA), this thesis draws on the broader literature on neoliberalism and financialisation to argue that accounting as a globalised practice is an instrument of neoliberalism. From this perspective, I argue that the adoption of IFRS embeds the ideological tenets of neoliberalism within its reporting regime, giving them the appearance of neutrality and making them difficult to identify, let alone challenge.
To reveal this ideological bias, this thesis adopts the Critical Discourse Analysis (CDA) elaborated by Norman Fairclough as its methodological framework. CDA studies the connections between discursive practices and wider social and cultural relations. It seeks to reveal how discourses are ideologically shaped to facilitate particular socio-political agenda. In doing so, this thesis shows how public discussions of the IFRS and FVA in China have been dominated by supportive discourses that rationalise the adoption with a problematic supposition of the „free market‟ and its unquestioned benefits. This discursive practice has created an appearance of „efficiency‟ and „freedom‟ for the transformation of the market that neoliberal theory preaches. The findings disclose, however, that FVA has produced significant volatility in the Chinese capital markets, which has prioritised the interest of Chinese elite and caused the costs to be borne by ordinary investors. The Split Share Structure Reform (SSSR) introduced by the Chinese government to institutionalise market freedom has contributed little more than creating an image that symbolises a commitment to the ideals of neoliberalism – privatisation of public assets, deregulation of markets and the adoption of IFRS.
The contradictions identified by this thesis reinforce the disconnection between the theory and practice of neoliberalism that many political economists have argued. Instead of ensuring the „trickle-down‟ of benefits to create greater welfare for all people or market efficiencies, promised by proponents of the reform, this neoliberalisation process has worsened social struggles and expanded inequities in wealth distribution in China. Accounting has been part of the technical architecture of neoliberalism, sustaining an image of the „free market‟ that is devoid of the regulatory and socio-political apparatus in China.