The Great Rejuvenation? China’s Search for a New ‘Global Order’

Asia Paper October, 2017

Executive Summary

This Asia Paper explores how China, a ‘partial’ global power, can set the agenda and determine the rules in a global order dominated by a declining yet unyielding global power. In exploring this question, we present the argument that building ‘alternative’ regional and global institutions might be a safer strategy for China. Further, it examines how China is through institutions, such as the Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB) incrementally delimiting its sphere of influence and shaping other states’ actions in Asia.

Despite the People’s Republic of China’s narrative that AIIB and the BRI have been great successes and projects of the century, China’s multilateral institutions still face insurmountable challenges.

First, these institutions are rising in a context dominated by other multi-layered, complex and embedded multilateral institutions within the liberal international order. China’s ambition to rewrite or at the least influence significant reform of the current liberal institutional order are therefore challenged. A major issue is that the Chinese multilateral institutions are expected to conform to the model and values of the liberal institutional order; hence, there is very little room for creativity and maneuverability.

Second, with more than 60 countries subscribed to BRI and at least 18 Western countries which are members of the AIIB, there is bound to be conflicts between expectation and interest. There is doubt over whether Ethiopia, Iran and Kazakhstan would share the same ideals and expectations as the United Kingdom and Germany.  It is therefore interesting to see how China will manage these diverse interests and expectations for AIIB and BRI.

Third, China faces external challenges resulting from internal political systems of countries subscribed to BRI and AIIB. The incongruence of understanding and acceptance of Chinese funded and built projects between ruling elites and citizens in Central Asia and African countries like Ethiopia will likely disrupt the implementation of BRI projects.

Fourth, China is not the only country offering alternative development models to countries in the Global South. Colonial legacies and preference for home-grown development models in Euro-Asia and Africa as well as competition from countries such as Japan and India will be a major challenge for China.

Nonetheless, despite the aforementioned challenges, China is ushering in a new dispensation in global economic governance and is putting a test to the dominance of the United States and the Bretton Woods Institutions. Thus, there is an implied acceptance that we are at the cusp of a multipolar world and China is leading.

Policy Implications

  1. If China is to be successful in offering alternative multilateral institutions, then it needs a more holistic and realistic assessment of its capabilities to maintain and guarantee a new economic governance model. This may include assessing and building its regional leadership before expanding to other regions such as Africa and Central Asia.
  2. Institutions, whether economic, security related or political enable a state to exercise control over the actions of other states. However, if China is to exercise influence over other states, it should be accepted by other countries to be both the legitimate and benevolent power that it aspires to be. This means China’s own internal political system; human rights record and attitude toward foreign businesses in China should be reformed.
  3. China’s rise is largely attributable to the liberal international order led by the United States. However, the global balance of power has changed significantly – new powers are rising. The current distribution of power within the liberal international order’s institutions should therefore reflect this new balance of power. The United States should in turn lead reform of the quota formula in Bretton Woods Institutions so that it is linked to the economic status of the rising powers.
  4. The Trump administration is reticent about its position regarding China’s multilateral institutions. If the United States is to influence the governance of AIIB and BRI so that they conform to the principles of transparency and accountability, then the Trump administration should have a clear position regarding these institutions.
  5. China must significantly improve its public diplomacy efforts to increase its visibility and influence beyond political elites in countries within the parameters of AIIB and BRI.

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