As US trade with China expanded, leading to the ``China Shock'', China's interdependence with the US and the rest of the world grew rapidly, increasingly exposing the Chinese economy to international markets and deepening the interdependence between China's economic performance and that of the US and other trading partners. I argue that this economic interdependence presents a double-edged sword for developmental authoritarian regimes like China's. Openness facilitates the economic growth necessary for maintaining popular and elite support. At the same time, changes in global markets -- whether from shifting terms of trade or from more sudden shocks -- pose risks to authoritarian stability. How do authoritarian regimes maintain domestic stability in the face of deep interdependence? I theorize that authoritarian regimes can maintain interdependence through a mix of centrally-mandated fiscal control and selective, policy devolution. Global crises can provide political opportunities and spur economic policy-making designed to reduce the exposure to future crises, partially attenuating the risks of continued interdependence. I provide several pieces of evidence to test this theory. 

First, I characterize general patterns of subnational embedded liberalism in response to deepening global integration. Panel-data evidence suggests subnational fiscal spending responds to export dependency. Next, to identify the effects of global crises, I develop a unique, subnationally-disaggregated measure of export dependency for China, based on the location and industrial classification of all Chinese firms across 340 prefectures. I combine this with data on changes in US imports of over 600 products following the 2008 financial crisis. Leveraging the crisis as an exogenous shock, I show that, counter to expectations, declining exports precipitated a geographical reallocation of government investment away from prefectures more negatively impacted by the crisis. This reallocation facilitated  political goals of geographical and sectoral economic rebalancing. Finally, I present  evidence from field interviews, tracing the implementation of China's social policy as a function of deepening global integration. Social policy devolution allows for regional variation in policy implementation and complements  top-down allocation of investment and spending. These findings have theoretical implications for understanding authoritarian regimes in the global economy, and practical implications for understanding the international political economy drivers of China’s economic policies.