Every generation, there are certain defining political events that shape the makeup of the international order. The collapse of the Berlin wall, the fall of the Soviet Union, and the end of apartheid in South Africa are some recent examples. For others, it was a transition from an authoritarian regime to a democracy. Much of the last couple of decades, however, has centred on a constant: the United States as the world’s hegemony.
After World War Two came to an end, the U.S. carved its future in the world by influencing the outcome of international organizations, such as the United Nations, the World Bank, and the International Monetary Fund. Altogether, alongside its military supremacy with bases worldwide, the United States is the most influential decision-maker in the international system.
Nevertheless, if history is any indication, the rise and fall of major powers is an inevitable occurrence, and with the election of Donald Trump as president, this perhaps is the beginning of this inevitability. Advocating an ‘America first’ approach to world affairs, it can be argued that Trump has done the exact opposite. By withdrawing from the Trans-Pacific Partnership agreement (TPP), the Paris Climate Accord, and significantly slashing the U.S.’ contribution to UN agencies, as well as drastically reducing the State Departments’ budget, these are all indicators that Trump is essentially abdicating the U.S.’ role in global leadership. Any professor, student, or political pundit will tell you that every power vacuum must be filled, and if this ends up being the case with the United States, a new willing and capable actor will have to occupy this vacant leadership role.
There is no state more capable of filling this role in our generation than China. For over a decade, China’s rise as an economic powerhouse has been widely recognized. It seemed as if though China’s economic prowess was going to directly challenge the hegemony of the United States, and had led observers to question the benefits and consequences between the Washington and Beijing models – the two names given to the model of political and economic governance that characterize the United States and China respectively.
In 2005, Chinese state-owned companies had only been investing outside its own borders in the United States, Britain, Ecuador, Syria, Australia, Papua New Guinea, and Kazakhstan, in relatively small amounts. Since then, that has entirely changed, and China has become the largest foreign investor in a remarkable number of countries, with significant strategic purposes and soft power that is now almost unparalleled in the regions in which they’ve consolidated.
Under most circumstances, China’s main objective has been to invest in commodities, energy, metals, agriculture, and construction. This is most likely due to its need to make sure it has the necessary resources to continue its growth prospects for the future. And so far, their sound investments has been successful, with the exception of those where the other country had its objections, it was a badly timed acquisition or in cases of nervous Chinese regulators. Considering that China has overseas assets that could reach 20 trillion USD by 2020, and that its finance sector is the second largest in the world, with assets of 33 trillion USD, there does not seem to be much of a check and balance approach to China’s growth or the extent of its global reach and dominance.
It’s grand project, however, the “One Belt, One Road” initiative, will have global implications once finished. The project, which plans on building and expanding infrastructure and trade routes for an interconnected Asia and Europe, both on land and water, is likely to reorient the global economy. The project, in its initial phases, already includes 17 countries in Asia alone, whilst intending to expand to the entirety of Europe afterwards. The scale of this development project is unprecedented, and the closest rival in history to such a project was the “Marshall Plan,” which ushered Europe into modern day development, and was funded by the United States.
In Namibia, they have invested in the Husab Uranium mine. In Nicaragua, they’re building a 50 billion dollar canal to rival that of Panama’s. In Ethiopia, they gifted funds for the new headquarters of the African Union. They own 10% of the U.S.’ entire federal debt. In countries like Afghanistan, Zimbabwe, Angola, Niger, Guinea, Sierra Leone, Ecuador, Myanmar, Papua New Guinea and Venezuela, the extent of China’s investment accounts to between 50% and 95% of the entire foreign direct investment made in those respective nations, making them heavily dependent on China for economic survival. In addition, the Asian Infrastructure Investment Bank (AIIB), started as a global initiative by China, has been seen as a challenge to existing international institutions such as the IMF and the World Bank.
The pattern is clear, China has been locking up resources in countries with mostly autocratic governments and struggling economies. It has become especially powerful in many countries where there are risky political and legal regimes; places that western investors usually avoid. The repercussion of propping up autocratic regimes with financial support is already troubling. Combining the cumulative effects of these states with that of China’s, a country that has been asserting its rights over the South China Sea and finds ways to interfere in academic, legal, and political debates both within and outside its own borders, should be a call to action.
While the powerful nation has done well for itself, and its rise to possibly being the world’s leading superpower can be considered the only natural course due to it’s economic, financial and political grandiosity, every system needs effective checks and balances. Evidently, in the system of international relations and global affairs, China’s influence is increasingly without checks or balances. Large transitions between great powers throughout history have usually come through victories in violent worldly conflicts; and if this one is due to economics and politics, why not actively work on designing the future in preparation for it? Why not avoid the possibility of conflict?
Regionally, countries such as Japan, India, Australia, and the ASEAN countries should find ways to explore their own economic integration, with the TPP being a good start. Developed nations with steady and strong relationships with developing countries should maintain their relationships and work alongside them to bridge the inequality gap in the world and strengthen their institutions. They must be able to rely on their institutions. The law of the host country where the investment is made should always have superiority in legal matters, regulatory bodies should closely monitor activities in host countries to ensure matching standards, and legislatures worldwide should enhance and reaffirm the mandates of their own committees on foreign investment, to ensure the protection of national security.
Competitiveness and a changing world do not necessarily mean clashing civilizations and a forced change towards the Beijing model of governance. Despite the U.S.’ increasing reluctance to be the global leader it has been ever since World War Two, other actors must enter it in order to balance China’s potentially unrestricted economic and political power. The World Bank and the IMF must work in conjunction with the AIIB, and regional bodies, such as MERCOSUR and the African Union, must unify their positions and deal with larger, more powerful countries with a more unified stance to ensure their own interests are being met as well, without the fear of intimidation or repercussions. Change is coming, but it must come from all relevant parties, not by one powerful actor. With collective efforts, a balanced and stable world can bring about the same level of economic productivity and infrastructure development and investment as any other geopolitical setting.