Rule-breaking by US leads to decline of global order
Unrelenting and creeping process of ‘de-dollarization’ set to accelerate in the years ahead
Whenever the United States takes actions against another nation, be it an invasion, an attempt to engineer regime change, wage a trade war or impose sanctions, the rationale it offers for the public is that it seeks to safeguard the rulesbased international order (IO) it created after World War II. Ironically, the US itself is the major culprit in undermining the IO, particularly after the end of the Cold War.
By frequently and flagrantly breaking the rules of the IO ostensibly under its charge, the US has damaged its reputation, credibility and value to other nations, debilitating the postwar order it established. Today, the IO is no longer able to foster world peace, economic globalization and international cooperation. The ensuing world disorder will in turn redound to the detriment of the US itself.
Some of the draconian sanctions, such as seizing the assets of the wealthiest individuals close to Russian President Vladimir Putin, which the US and its loyal allies have slapped on Russia in retaliation for its “special military operation” in Ukraine, are blatant and brutal infringements of the private property rights of individuals. Such harsh punitive measures imposed on civilians signal that the West is no longer a haven for a person’s property and assets. In the years ahead, capital outflows from the West will become an irrevocable longterm trend.
Even more harmful to the IO is the freezing of the reserve assets of Russia’s central bank, expelling Russia from the SWIFT financial payments system, and ejecting it from the crucial institutions of international finance. Iran, which had courted the wrath of the US, had already been punished similarly in 2019.
Not long ago, the reserve assets of Afghanistan were also confiscated by the US and could not be used by this poor country to help its longsuffering people.
More and more countries and people have qualms about the reliability and appropriateness of the US dollar as the preponderant “international currency”. Against this backdrop, the strangulating sanctions imposed on Russia will certainly be seen around the world as the egregious, illegitimate and unscrupulous “weaponization” of the US dollar and the international financial system underpinned by it. An unrelenting and creeping process of “de-dollarization” is underway, and will accelerate in the years ahead.
The rise of China’s renminbi, particularly its digital form, the increasing importance of gold, commodities and natural resources as storages of value and mediums of exchange, the mounting use of currency swaps between trading economies, the willingness of oil-exporting countries to be paid in currencies other than the US dollar, and the emergence of innovative forms of “barter trades”, portend an international economy where the role of the US dollar will be gradually eroded. The dollar’s descent will irrevocably diminish the status and capacity of the US as a world power.
The sanctions imposed by the US and its allies on Russia and other countries reflect a long-term and unmistakable trajectory of ceaselessly undercutting the basic rules of the IO that was devised by the US to serve its interests.
The end of the Cold War has seen the entry into the IO of non-Western countries, primarily China, Russia and India, which do not completely agree with the political and economic values of the IO, although they, out of pragmatic calculations, are still interested in participating in it while continuing to advocate reforms to make it more compatible with the interests of non-Western nations.
Nevertheless, the US, though willing to expand the span of the IO by adding new members, is reluctant to make significant reforms. In the case of the eastern expansion of NATO, a process inaugurated to enlarge the IO, the core security concerns of Russia have been not only arrogantly ignored but also trampled upon.
The way the IO has been enlarged by the US will eventually prompt many non-Western nations to lessen their commitments to the IO, look for other alternatives, or in the case of Russia and some other countries, construct a parallel and competitive IO in Eurasia with an embedded parallel financial ecosystem. All of these happenings will ultimately weaken the US-led IO.
The United Nations has been trumpeted by the US as the capstone of the IO. Over the years, with the growing influence of China and other emerging nations in the UN, the US has taken steps to gradually downgrade its importance, and occasionally even subject it to ridicule and abuse. Payments to the UN have been cut or delayed. The presence of the US in the UN’s affiliated bodies has shrunk appreciably. What is most glaring is that the US has taken unilateral military actions against other nations without the mandate of the UN, as seen in the Iraq War in 2003. The declining influence of the UN in an increasingly turbulent world will inevitably further undermine and fracture the IO.
Respect for the sovereignty and territorial integrity of each independent nation is upheld as a sacred principle in the IO. Unfortunately, this principle has been violated blatantly and repeatedly, particularly after the end of the Cold War when US power became unsurpassed and uncontainable in the so-called unipolar moment. Suddenly, regime change, nation-building, “color revolutions”, anti-authoritarianism, R2P (Responsibility to Protect) and the exporting of Western democracy have become the new noble goals of US foreign and military policies. Detaching a part of the territory of another sovereign nation and recognizing it as an independent country (as in Kosovo) are billed as a laudable endeavor. Economic globalization featuring free trade is applauded as an integral and inalienable component of the IO. The rise of protectionism, populism and the “America first” ethos, however, have made free trade a bugbear to many US people. International trade has been much “weaponized” by the US in the recent past, particularly under former president Donald Trump, and the “weaponization” of trade has continued unabated even without Trump.
China, as the largest trading country in the world, has been the major target of the US’ weaponized trade. The heavy tariffs imposed on Chinese exports to the US are a prime example of the US declaring a trade war against another country. Along with the growing restrictions on free trade will be the inexorable process of deglobalization. At the end of the day, everybody is going to suffer.
The US has excoriated other countries, China especially, alleging it is balefully and provocatively undermining the IO by selectively abiding by its rules while flouting many others. China is tagged as a “revisionist” power by many US politicians and academics. It is, however, an undeniable fact that the success of China’s reform and opening-up strategy is contingent on becoming a responsible member of the IO.
With the continual rise of China and its ever-broadening national interests, it is not illegitimate or unreasonable for China to call for reforms of the IO to reflect the changing balance of power among nations in the world. By advocating for reforms of the IO, China also serves as the champion of the interests of most developing countries that harbor grudges against the IO for its discrimination against nonWestern countries.
China and other non-Western countries are right to accuse the US of unilaterally breaking the rules of the IO to advance its own interests at the expense of other countries, and therefore the US itself is the real “revisionist” power which, more ominously, has betrayed its own rules, institutions and promises.
The decline and disruption of the IO have already produced international disorder and hampered international cooperation in tackling the COVID-19 pandemic and environmental degeneration. If the US is serious about upholding the IO and pulling the world back from the precipice of international disorder, it should at least set an example to the world as the faithful and trusted follower of the rules originally made by itself.
The author is emeritus professor of sociology at The Chinese University of Hong Kong and vice-president of the Chinese Association of Hong Kong & Macao Studies. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.