Prominent observers of the global political economy rightly claimed that the international system has entered into a period of flux with the global economic crisis in 2008.
The aftershocks of the crisis weakened the institutional foundations of the multilateral global order and participative governance platforms, precipitating a trend towards unilateralism on the part of both established and emerging actors. While debates regarding the transition to multi-polarity, trade and currency wars intensified in the wake of successive political and economic salvos of the US administration, retaliatory actions of China, and the Brexit process; the future of the global system is staring into an abyss.
Such periods of systemic shifts typically witness harsh competition between competing visions for globalisation by established and emerging global powers.
Currently, we have American exceptionalism as expressed by the Trump administration versus Chinese pragmatism embedded in projects such as the Belt and Road Initiative (BRI) and unfettered international trade.
The US administration's recent push towards neo-protectionism and withdrawal from liberal principles, as well multilateral governance platforms, signifies a desire for the pursuit of pure power politics in a chaotic and poorly-managed international system. This, in turn, represents a radical departure from the liberal vision of globalisation constructed on the notion of hegemonic stability and ‘Pax Americana’.
While the US withdraws from several United Nations bodies such as UNESCO, Human Rights Council, Population Fund; cuts its support for the Palestinian peace process; contemplates withdrawal from the World Trade Organization; and criticises the ineffectiveness of NATO, it is crystal clear that the form of globalisation envisioned by Washington DC is going through a qualitative shift.
In the near future, American exceptionalism is likely to express itself through selective integration via a network of intensive bilateral engagements with countries categorically accepting the neo-protectionist, aggressive, discriminatory and destabilising nature of US policies.
Rather than dealing with the sophisticated politics of maintaining rule-based international regimes, the US seems to prefer moving forward through issue-based, ad hoc, conjunctural and flexible alliance-networks with several groups of countrie. In this endeavor, the overarching long-term strategic priority is containing and delaying the economic, military and political rise of China through bilateral and regional alliances.
Against this exclusionary and destabilising vision of globalisation, China proposes a rivaling path for globalisation based on non-interference in domestic affairs, uninterrupted trade flows, inflows of direct investment and infrastructure collaboration.
The pragmatic global vision shaped by President Xi Jinping reflects the long-term strategic interests of Beijing as it tries to close the economic and technological gap with the US, but at the same strives to offer more balanced ‘win-win’ deals to its partners.
As the manufacturing hub of the global economy, China has a vested interest in promoting unfettered trade in manufactured goods, as well as trade-related infrastructure development. In this context, the massive Belt and Road Initiative (BRI) constitutes the backbone of China's global integration strategy on the basis of integrated energy, logistics, transport and communication linkages across the Eurasian axis reaching to the Middle East and Africa.
Extensive economic corridors are planned in Europe, the Middle East, Pakistan, Myanmar, Central Asia and Indochina in order to ensure safe and cheap transport of energy, goods, services and people to and from the mainland. Generous development credits are being provided by the Asian Infrastructure and Investment Bank (AIIB), predominantly financed by China, in order to encourage developing countries and emerging powers to take part in the initiative.
Major Asian and global powers like Russia, India and Japan are involved in various ways in the Belt and Road Initiative through their state-owned or private companies and are being given massive opportunities through infrastructure projects. However, all of these powers have divergent national interests and carry serious concerns regarding the global vision and true intensions of China towards regional and global dominance.
The kind of project-based and pragmatic integration pursued by Beijing gives these powers enough room to be part of ongoing initiatives through competitive collaboration; yet these countries occasionally collaborate with the US in its efforts to contain China as well.
As for the US, following a strategy of containment against China is established as a long-term fundamental goal of state policy.
Neo-protectionist measures from the US in the steel and aluminum sectors openly targeted Chinese exports, as well as other protectionist steps that were designed to reduce a massive trade deficit that surpassed $350 billion.
Intensifying collaboration with Japan, South Korea, India and ASEAN countries represents a strategic feature of the new US policy aimed at surrounding China with a dense network of alliances and partnerships in Asia.
The recent rapprochement with the EU involving crucial exemptions from trade barriers could also be interpreted in the context to isolate Beijing. In this context, it was not surprising to see the former top advisor to President Trump, Steve Bannon, declaring that the US was involved in a trade war with China for decades and victory was inevitable.
Steve Bannon might not represent the mainstream of American policy circles but his remarks certainly underline the overarching sentiments around the White House.
Time will show whether American exceptionalism expressed through the unilateralism of the Trump administration, or Chinese pragmatism via trade and infrastructure collaboration will prevail in the long-term.
The US certainly has structural advantages such as the status of the US dollar as the global reserve currency, control over global financial flows, dominance in existing international institutions, cultural hegemony expressed through movies and music, the strength of its educational institutions and research-development ecosystem, and unrivalled military dominance in defense industries. But China, with its massive population, vibrant economy, fast-moving technology sector and aggressive foreign economic policy, represents the most credible challenger that could overcome the US as the global hegemonic power over the course of forthcoming decades.
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