China and the Rules-based orderRBO
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Can Washington compromise?

Wu Xinbo
Professor & Dean, International
Studies at Fudan University

“China is not going to overturn the current order or create a new one, but it will drive the order’s evolution.”

China is a major beneficiary of the prevailing international order. Politically, as a permanent member of the United Nations Security Council, China enjoys significant privileges as well as high international standing. Economically, China has emerged as the world’s second-largest economy during the last four decades, thanks to an open international economic system. On the security front, since the end of the Cold War, China has not been confronted with a major external military threat and has benefited from an overall peaceful international environment.

On the other hand, Beijing also harbours reservations and even dissatisfaction about the current order. Politically, this is an American-led and Western-centred order — developing and non-Western countries are generally subject to a lesser position. Economically, Beijing aspires to a status commensurate with its growing power in major international economic and financial institutions. Regarding security, Beijing seeks reunification with Taiwan as well as greater security in the Western Pacific.

Generally speaking, China holds a significant stake in the existing order and, by and large, favours its preservation. Meanwhile, Beijing also desires to reform the order so as to better accommodate its interests and preferences. China is not going to overturn the current order or create a new one, but it will drive the order’s evolution and adaption in a fast-changing world. 

Taking into consideration its capabilities, interests, and feasibility, China’s efforts to reform the current world order have prioritised the international economy and finance, regional cooperation, and emerging areas such as the oceans, the poles, cyberspace, and outer space. Beijing seeks to increase further its voting rights and quotas in the World Bank and International Monetary Fund (IMF) to reflect its ranking in the world economy. Meanwhile, it also endeavours to promote various forms of regional economic and security cooperation, establishing mechanisms that serve Chinese interests and preferences. In the international efforts to establish rules for cyberspace and outer space, China will make sure that it is a rule-maker, not just a rule-taker.

Compromise between China and the United States and the West could be reached in the areas of international economy and finance. For instance, China’s voting rights and quotas in the World Bank and IMF have been steadily increasing, reflecting its growing weight in the global economy, with an expectation that China will make more contributions to these multilateral institutions. Despite opposition from Washington, Beijing’s initiative in establishing the Asian Infrastructure Investment Bank was endorsed by most Western countries, including many US allies. Compromise is also possible in the field of regional cooperation — even though there are differences between mechanisms favoured by China and the United States, they can still co-exist, as shown by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, or the Shanghai Cooperation Organization and the US-led alliance system. In emerging areas such as cyber and outer space, some kind of deal can be struck given the fact that China is already a major player , and its voice has to be heard if the rules and mechanisms are going to apply to China. 

The main challenge will be security. While China has been seeking a more favourable security situation in the Western Pacific, the United States has been trying hard to resist. It is an open question whether Washington is willing, or has the capability, to reach a strategic understanding with Beijing over the security landscape, which reflects a shifting balance of power in the region. Also, any compromise that does not include a solution to the Taiwan issue is unsustainable for Beijing. In fact, Beijing is likely to push harder on the matter in due course, either because it loses patience with separatist momentum in Taiwan, becomes more confident of its growing military capability, or both. This requires a new understanding across the Taiwan Strait and between Beijing and Washington.   

Professor Wu Xinbo is Professor and Dean, Institute of International Studies; and Director at the Center for American Studies, Fudan University.