The world is undergoing rapid changes, ushering in a new era of globalization and global governance, as well as a transitional period from the old world order to a new, emerging one which will give developing countries and emerging powers a bigger voice, compatible with the changed global political and economic landscape. This article discusses how the world order will evolve and what new role China is likely to play in that fundamental transformation and in improving global governance.
End of Pax Americana
President Xi Jinping of China said, “From the historical perspective, humankind is now going through an era of great developments, tremendous transformation and fundamental readjustments.” Henry Kissinger said that “the present international system has undergone unprecedented transformation not seen in the last four centuries,” and Zbigniew Brzezinski indicated that “the center of global power has moved from both sides of the Atlantic to the Far East.” The end of Pax Americana, or the American Century, is in sight as a result of the Great Convergence, the hallmark of the second half of the 20th century and the first two decades of the new century. The Convergence between the center (U.S.-led Western countries) and periphery (all other countries) in a global system formed since the “long 19th century” has been the most prominent feature of international relations in the years following World War II. One indication is that the aggregate GDP of advanced economies has dropped from 64% of the world total in 1980 to around 40% at present, showing that the balance of economic power is shifting in favor of emerging markets and developing countries. It is necessary for the global governance architecture to be reformed accordingly, but the pace has been slow (as usual) in adjusting to the changed economic landscape, and voices from various quarters calling for reform of the governance system are getting louder.
It is recognized universally that the current world order is in crisis and a new one is just on the horizon. The confusions and vicissitudes being witnessed today are the harbinger of a prolonged transition wherein tremendous upheavals and increasing uncertainty may be with us for several decades to come, even though the big trend toward a fairer and more just world order is no doubt obvious. One case in point is the increasing political radicalization in the United States and some European countries, both a consequence and a driving force of the rising populism that is breaking down political, economic, and social cohesion in afflicted countries.
Four Challenges to Global Governance
The arrival of a prolonged transition leading to a more balanced world order has brought us greater uncertainty and turbulence, which makes many countries feel uneasy about the present and unsure of the future. There are four major challenges that warrant out attention.
Firstly, the United States, being the leading power in the existing world order and global governance, has upended itself and become the most troubling uncertainty in the world today. Over the past two decades, the United States has been unhappy with the shifting balance of power towards developing nations like China. The United States therefore has become more inward-looking and less inclined to continue providing “global commons,” and intends to change and remake governance rules to maintain its hegemonic position and moral high ground in world affairs while continuing to garner the most benefit from globalization. The Trump Administration, through its “America First” policy, has negated many advances the world has achieved since the 1950s. Not only is it renegotiating current bilateral and multilateral trade agreements, it is also retreating from past commitments to collective management of global issues like climate change.
Secondly, the widening gap between rich and poor, or the imbalance between market efficiency and social justice, continues unabated in the era of globalization, tearing apart the social fabric of many countries including the major advanced nations, renewing the classic capitalist phenomenon of “class divide” or “class struggle.” As predicted by Karl Marx in Das Capital and further corroborated by many modern-day economists such as Thomas Piketty in his 2015 book Capital in the 21st Century, the fundamental contradiction between capital and labor remains the hardest nut to crack. Data shows that the rate of capital gains always outstrips that of GDP, giving capital owners a much bigger share of wealth from globalization. As most would agree, when a market is left to its own devices with unchecked free movement of capital, capital will inevitably seek the most profits regardless of other considerations such as social justice and environmental protection. That is one of the major sources of rising populism and antiglobalization worldwide.
Thirdly, increasing global uncertainty has brought about ever more entanglements and complexity in relations between and among major powers which, if not handled properly, could lead to geopolitical conflicts and confrontations. Major powers must consult in earnest and work together to build a consensus on based on the common good of mankind. As such, the big question today is whether it is possible to find a way to diffuse tension and build a brand new relationship between major powers. The most outstanding and overarching challenge of all is surely the “Thucydides Trap” between rising and incumbent powers. What kind of collective security arrangement do we need for lasting peace? The United States and China are the two countries in “the First Tier” of global power. For world peace to last after more than 70 years, collective security has to be based on a global partnership of cooperation rather than a system relying solely on bilateral military alliances with the United States at its core.
Fourthly, on a higher philosophical level, the challenge is about civilizations and their relationships. Will there be a clash of civilizations or a fusion? Will the future world have one civilization conquering another or peaceful co-existence between civilizations? If we look deeper, most sources of friction can be traced to an insufficient understanding among civilizations or a lack of exchange and dialogue among them. Harvard Professor Graham Allison, following Huntington’s prediction about the inevitable clash of civilizations, reached the same conclusion that there are two supposedly “best” civilizations in the world today. He indicated that the United States believes strongly that the U.S.-led Western civilization continues to be “the beacon on the hill” and its political system - liberal democracy - is the supreme model for every other country to follow. On the other hand, China pronounces that Chinese civilization is unique and uninterrupted for over 5,000 years. Yet there cannot be two “number ones.” If the Western sense of civilization superiority cannot be overcome, their foreign policy will always be misguided, and what is termed as regime change and color revolution will not stop. This explains the chaotic world today: a result of that Western logic.
What Global Governance Means to China
China’s development and its diplomacy are closely tuned into globalization and global governance, especially after China joined the World Trade Organization (WTO) in 2001. At the critical juncture of China’s economic development in the late 1970s, Deng Xiaoping took an unprecedented, innovative and revolutionary step to move China onto the path of modernization by embracing globalization and global governance with a firm Chinese footprint. The past four decades have proven that China has made the right choice, not only in its own interests, but also of the world as a whole. Globalization has offered China a new and feasible route to become a developed and globally powerful nation once again. It also offers a historical opportunity for China to regain the status of a major power by persisting in peaceful development. That is definitely different from what has been done by other major powers in history, who have indulged in conquest, plunder, colonization, and aggression. Admittedly, the last round of globalization would not have been so comprehensive and profound if China had opted to remain outside. During this historical period, the relationship between China and the rest of the world has undergone a fundamental change from isolation to one of increasing interdependence with the rest of the world.
China’s Peaceful Development Strategy
Some Western powers talk often about the rapid rise of China in modern times with great anxiety, even resentment or fear. China prefers to refer to its rapid industrialization and rise as “development.” These are not simply terminological differences. They actually represent rather different worldviews. The key is to examine closely the cultural and civilizational DNA of China. Will China, like other previous major powers, eventually become a hegemonic power? Or will it be a country which, as it grows stronger, becomes more determined to safeguard world peace and promote global economic growth by maintaining a global governance system as agreed to and accepted by the international community? Here, the core concept of peaceful development underpinning China’s development and its diplomacy should be the prism through which China’s rise is to be viewed and understood. As the term “peaceful development” suggests, peace and development are the two essential pillars in China’s national and global strategy. China has understood from its own experience, especially during the long years from the Opium War in 1840 up to the founding of the People’s Republic in 1949, that without economic growth as well as sovereignty and national security, there would be no foundation at all on which China can become a respected nation with full sovereignty and territorial integrity.
Building a strong and industrialized economy is thus the prerequisite to safeguarding one’s sovereignty and development interests. In the era of globalization and economic interdependence, peaceful and cooperative development is the only way by which China will be able to achieve economic and political development. Any engagement in war or military conflicts will ruin China’s environment for peaceful development. That understanding of history and China’s cultural DNA for peace has been guiding China’s development and its diplomacy all along.
We need look no further than recent history where China’s economic boom coincided with the fast expansion of globalization, especially global free trade and investment. It was possible for China to integrate into global governance given its approach of peaceful development.
China is the world’s most populous developing country. The choice for peaceful development was not easily made; it did have its roots in China’s cultural heritage for peace and harmony and its arduous pursuit of broad international cooperation at the very beginning of the People’s Republic. One may remember the Bandung Conference held in 1955 in Indonesia that brought together a large number of poor countries from Asia, Africa, and Latin America, most of which had just achieved their political independence from long years of colonial rule. The leaders in attendance, including China’s late Premier Zhou Enlai, proposed a set of foreign policies on behalf of the emerging nation-states aimed at peaceful co-existence and peaceful development with Western countries.
Basic Tenets of China’s Cultural DNA
China views its relations with the outside world, including its relationship with other major powers like the United States, through the prism of its cultural traditions and values.
Often, cultural DNA reflects the founding fathers’ thoughts about human development. Over time, these core psychological instincts become deeply embedded, forming the cultural norms of different societies and guide just about everything that goes on, including a society’s responses to external challenges.
There are four fundamental concepts that form the cultural DNA of China - integrity and connectivity; tolerance and inclusiveness; harmony and peace; and a holistic approach to world affairs. They are entwined with one another. These basic tenets of China’s cultural DNA are visibly displayed in China’s development strategy and diplomacy and will shape its new role in global governance.
The history of modern China and its deeper involvement and nascent leadership role in global governance, especially since 2008, has shown that China is and will continue to be an important player in global governance and in shaping the emerging world order for the betterment of mankind. The future is bright and the road is long, but we are confident that mankind has enough wisdom to build “a community of shared future” as proposed by President Xi Jinping.
China’s Role in Global Governance
In the past decade, China has started to enjoy greater global attention and influence, in particular since 2008 when the West, represented by the Group of Seven (G7), or the “rich men’s club,” was unable to cope with the financial crisis with the existing governance system. The G20 has a better and more balanced representation between advanced and developing countries and thus captured the attention of the world in performing the heavy lifting needed to tackle a global challenge so pervasive and shocking that only a “united front” of all systemically important countries would be capable of managing. China was naturally called upon to play an essential role in the context of the G20 to provide leadership and guidance together with other major economies for managing the dire consequences of the global financial and economic crises, an immediate and pressing challenge to the whole world. That is why the year 2008 is often cited as a turning point for China in its deep involvement in global governance. Similarly, 2001 is also a key year, as China joining the WTO is the critical moment for China’s participation in global governance and globalization.
It was not just about China, but rather, about the sharing of global economic power and governance of the world economy by all countries, big or small, rich or poor, as equal members of the international community. The G20 mechanism was created in 1999 after the Asian financial crisis in 1997/1998 as a forum for discussion of global economic affairs among finance ministers and governors of the central banks of 19 countries plus the EU. But it was not designed as a decision-making or even coordinating body. The G20’s assumption of economic decisions in the face of the financial crisis was both an improvised response and a long-term solution to global governance deficiency and a world in disarray.
China took the G20 and its new role in global governance seriously and positively, not only because it was the only institution available at that time that was fairly composed with a balanced mix of both developed and developing nations, but also because it reflected the beginning of a new era in global governance, a transition from “Western-led or U.S.-led global economic governance” to “co-governance by both the West and East,” a transition that had started in the late 20th century and continued apace in the first two decades of the 21st century. This is the process through which China’s role in global economic governance has been strengthened, and a new and more proactive role is awaiting China. It is certainly not something that was pursued willingly and intentionally by the U.S.-led Western nations. Rather, it was because they knew when the financial crisis broke out that without the proactive participation of China, India, Brazil and other developing and emerging economies, there would be no possibility of rolling back the financial crisis and global economic growth would simply stall. It was indeed a turning point for China and a wake-up call for the West in global governance.
The United States at that time favored the idea of turning the G20 into the key platform for global economic governance and supported China playing a bigger role. The United States, with a realistic strategic assessment of the financial crisis and the devastation it cause, came to the conclusion that it was in its strategic interest to have China play a secondary role within the system.
In addition, the economic and financial relationship between the United States and China had become so intertwined that it was critical for China to extend a helping hand to save the American financial market from a total meltdown. As China had the largest amount of foreign reserves which were mostly invested in American treasury bonds, the United States needed its cooperation to avoid a total collapse of its financial system. In fact, in late 2008, then President George W. Bush sent his Treasury Secretary to China to seek assurance from the Chinese government one this. Of course, China understood clearly that it was so closely tied into the U.S.-led financial system that should the system fail, China would be among the first to suffer the dire consequences. This increasingly important interdependent economic relationship, combined with a more complicated political and military relationship, has become a hallmark of the new era that calls for the establishment of a new major-power relationship between the two countries. The United States also saw the rapid rise of the Euro as a threat to the dominant world currency position of the U.S. Dollar. By 2007/2008, the Euro was close to about 20% of the world’s total reserve currencies, which was considered a critical threshold by the United States.
China Model Shaping the Emerging World Order?
In discussions about the emerging world order, the term “China Model” has appeared very often in the last decade, usually in association with its success impacting and influencing the future course of the emerging order as China gains both “hard power” and “soft power.”
To be specific, there are two developments that have left a large footprint on global governance. On the one hand, it is a fact that the 2008 financial crisis put a big question mark on the viability of American neo-liberalism as the guiding economic principle for global economic governance. The credibility of neo-liberal economic policy has been under fire for some years. On the other hand, China has been growing remarkably, riding on the wave of globalization proving itself to be nothing less than an economic miracle.
Many countries, in particular developing ones, have begun to wonder whether the “China model” is an alternative to neo-liberalism. Should there be a Beijing Consensus rather than Washington Consensus as suggested by Joshua Cooper Ramos? That has been the case although Chinese leaders keep emphasizing that China has no intention to export the “China model,” because the success of China in its domestic governance shows that the development path China has taken with guarantees from its political system has proven to be the right “recipe” for China and maybe some under-developed countries.
Amazingly, China is a role model for economic growth but also balances market efficiency and social justice by reducing poverty in the last few decades.
In addition, the last decade has seen China starting to develop and contribute to the “global commons” by way of creative and innovative ideas and plans in global governance. The Belt and Road Initiative (BRI) is just one shining example. It transcends ideological, economic, and cultural differences to provide a new platform for cross-cultural exchanges and economic cooperation which will, when successfully implemented, benefit participating countries and regions. Furthermore, China’s contribution to global governance is open and inclusive. Apart from the BRI, China has also been committed to building global partnerships and creating a new collective security framework. In January 2017, President Xi Jinping delivered a series of eye-opening speeches at the UN Headquarters and Davos, appealing to all nations to work toward building a community of nations with “a shared future.”
It is certainly no exaggeration to suggest that the China model, if there is indeed such a model, will serve the world and will undoubtedly open a new chapter in the history of mankind. The emerging world order, then, will be shaped by such positive interactions among nations with a shared destiny to live in long-lasting peace and prosperity.
Some Western powers have been anxious for the last two decades over the fact that China is growing stronger year by year and puts forward ever more proposals aimed at better global governance. They wonder whether China will continue to be cooperative within the existing global governance system or try to overturn the system and create a new one. As a matter of fact, there is nothing to worry about, as China has been a big beneficiary of the current system and global governance architecture. It therefore has neither desire nor interest in “turning the tables” on the existing global governance system. We have every reason to believe that China’s greater and deeper involvement in global governance will help improve the world.