The Global Geo-Economic State: China and Transformation of Great Power Politics

• In Event: Deciphering Chinese Politics and Foreign Policy: New Empirical Analysis

Abstract

Until very recently, the United States and China had engaged with each other in a post-Cold War world where geopolitics took a backseat and global commerce reigned supreme. But now we have accepted US-China competition as a given and the dominant reality of world politics at large. Why and how did engagement end abruptly, only to be replaced with a great-power politics that has seen interdependence unraveled and geopolitical tensions brought back to the front burner? What patterns have emerged suggesting how great-power competition will play out in the 21st century? The paper addresses these questions. The central proposition of the paper is that it is China’s rise in geoeconomic power that instigated the onset of US-China competition. And geoeconomics continues to drive and shape the emerging great-power politics. Mainstream theories in International Relations (IR) such as power transition underscore the structural condition for US-China competition but cannot explain the timing of the competitive turn in US-China relations or its likely features. Studies that attribute the change to China’s assertiveness disagree on what constitutes assertiveness and when exactly China turned “assertive”. Ultimately the literature still lacks a good answer to the fundamental question of what incited US about-face in its China policy in 2017-2018, upending its longstanding globalist policy orthodoxy in favor of geopolitical competition. The paper offers a novel explanation, arguing that the policy reversal was catalyzed by China’s rise as a global geoeconomic power. From the end of the Cold War through the early 2000s, China evolved from a beneficiary in the geo-economic world to a global geoeconomic competitor itself. Until recently, the world saw a prolong period marked by inter-state commercial competition, often with multi-national corporations leading the charge. Unencumbered by concern of great-power war, globalization accelerated with technological advancements, particularly in telecommunication. China benefitted from global market competition dominated by advanced economies of the United States, Europe, and East Asia. But by the 2000s, China itself started to emerge as a geoeconomic competitor. It became the world’s 2nd largest economy by official exchange rate in 2012, with fast growing manufacturing capacities, technological prowess, and trading power. Equally important, China became a post-responsible power, setting its own terms for global engagement rather than playing by the rules set by the West. Having tightened its control over the Chinese economy, the Communist Party-state launched ambitious industrial policies such as “Made in China 2025” and the global Belt and Road Initiative. China had become the global geoeconomic power posing as systemic threat to the United States and the West. The paper starts with an inquiry into China’s rise as a global geoeconomic state.
Next I investigate how China’s geoeconomic power prompted the United States and its Western allies to view China’s threat as existential and systemic, leading to trade war and tech decoupling-and escalating geopolitical tensions. The third section looks at the interactive patterns of geoeconomic and geopolitical competition in great-power politics. I argue that the centrality of geoeconomics in driving geopolitical tensions explains why the competition has been so escalatory and combustible. Yet, at the same time China’s global geoeconomic power has also compelled both sides to limit geopolitical tensions, allowing for great-power management and cooperation. This suggests a possibility that a return of great power politics will not likely to be a repetition of the past.

Author

• Yong Deng, U.S. Naval Academy