Are we ready for a China-led world order?
In 1946, diplomat and historian George F. Kennan, writing as Mr X, sent an 8,000-word telegram to the State Department about Joseph Stalin’s aggressive foreign policy. He warned “there would be no permanent peaceful coexistence” between the United States and Soviet Union, and his analysis provided an influential underpinning for America’s Cold War policies. On the Soviet challenge to the US-dominated capitalist and liberal order, Kennan wrote, “the main element of any US policy toward the Soviet Union must be that of a long-term patient but firm and vigilant containment of Russian expansive tendencies.”
The Soviet Union, historically one of the most powerful rivals of the United States, collapsed decades ago. Nonetheless, threats to the US-led liberal international order have not yet been eliminated. The current order wrestles with both external interference and internal division. On one hand, the US leadership faces widening bifurcation between “American first” policies and keeping to the path of globalisation. On the other hand, a growing China dangles strength with assertive industrial policies and barely disguised ambition to transcend its rival.
There are many ways to address the question on whether China challenges the current world order — from Beijing’s intentions or its de facto role in the current system. The answer to this complicated question can be divided into three layers: China reshaping itself to engage actively in the current world order, rising and gradually asserting its global influence while also contributing innovations. The current world order has operated for decades under US dominance. Political democracy and capitalism market economy are the most prominent characteristics, with the US and the EU typically supporting democratic movements and globalisation. Free trade binds countries together so that war is deemed too costly to wage.
In retrospect, China abandoned its Soviet-like planned economy model in 1978, starting market-oriented reforms and gradually opening the market to private and foreign sectors. China partially adjusted its financial institutions and industrial establishment, and became a major component of the current order. The government ultimately lifted price controls and actively engaged in the global trade system, joining the World Trade Organisation in 2001 and becoming a major exporter. During the recent waves of anti-globalisation, China portrays herself as a firm advocate of multilateralism and free trade with President Xi Jinping emphasising that economic globalisation is “inevitable and irreversible.”
Furthermore, China is one of five countries with a UN Security Council veto, and welcomes development support from international institutions, such as the World Bank and the International Monetary Fund. China is now the second-largest funder of UN peacekeeping forces, participating in multiple UN programmes. In 2015, Beijing joined Washington in developing new norms for dealing with climate change and cyberspace conflicts. China’s economic institutions are still complicated, distinguished from those in western countries with its conspicuous state intervention. In general, China so far cannot overthrow or challenge the current world order, from which it receives significant benefits. Rather, China adapts.
Secondly, a rising China exerts global influence in many areas. It has achieved rapid economic growth, gaining stakes to fill the power vacuum caused by wavering US positions. According to the Atlantic Council, the US still maintains a lead in global influence, but its share is declining. Not only in East Asia, but also outside the region, including in Nato member states and parts of Africa, China has surpassed US influence. The United States is cutting support to a number of international institutions and agreements.
Meanwhile, China increases its influence on the international stage with financial backing. China’s UN contribution will rise to just over 12 per cent for the period 2019 to 2021, granting the country more power in international affairs. China’s voting rights in the IMF have increased, and it holds a deputy director position. In Europe and the US, Chinese expansion of overseas investment, in terms of quantity and quality, reflects the Chinese economy’s growing sophistication for greater global influence. In the US, China also utilises methods such as co-optation and acquisitions to complete corporate transfers. Many of these technologies — such as supercomputing, artificial intelligence, robotics, semiconductors, drones, hypersonic
The United States does not offer a grand narrative appealing to large majorities domestically, much less to other states. A new equilibrium is underway, and the process will last until the United States and China find a balance on power.
and 3D printing — will help determine the future of global economy.
Thirdly, with growing economic strength, China is gaining confidence to provide innovations to the current order, pointing out that maintaining the current system is not enough to cope with emerging challenges. Chinese leaders repeatedly stress that China remains a powerful supporter of the current order, not to replace existing organisations, but supplementing them to strengthen that order. China is building the Asian Infrastructure Investment Bank, with more than 65 countries signing on as members. The new institution provides funding for China’s ambitious Belt and Road Initiative, aiming to enhance regional connectivity and prosperity.
China’s rise challenges the balance of the US-led order, among the many forces contributing to its deterioration including refugee crises, climate change, and terrorism. The United States does not offer a grand narrative appealing to large majorities domestically, much less to other states. A new equilibrium is underway, and the process will last until the United States and China find a balance on power. —Yale Global