GUEST COMMENTARY: HEGEMONIC STABILITY THEORY AND THE RISE OF CHINA

Two of the most polemic topics in international Politics in the 21^st century pertain to the pace and depth of globalization and the rise of China.In this essay I aim to briefly examine the rise of China and the possibilities this may augur to the world as America’s influence begins to recede.

Hegemonic stability theory (HST) - a theory which was principally applied in the study of International Political Economy- developed through the writings of Kindleberger, Keohane, Gilpin, Modelski, Snidal and Lake. “Cooperation and a well-functioning world economy” according to Grunberg is “dependent on a certain kind of political structure, a structure characterized by the dominance of a single actor. Dominance by a hegemonic power constitutes the optimal situation for ensuring and maintaining an open and stable world economy.”

Postulating the HST, Wohlworth says that “powerful states tend to seek dominance over all parts of any international system…fostering some degree of hierarchy within the overall systemic anarchy.…the theory's core prediction (therefore) is that any international order is stable only to the degree that the relations of authority within it are sustained by the underlying distribution of power.” Snidal goes on to argue that the fundamental propositions of HST require the following conditions: 1) that the hegemony’s domination should benefit all (especially the weaker members of the international system) as well as that 2) the presence of a dominant state should lead to greater stability in the international system.

Advocates of HST support the notion of “American predominance in world affairs and declare  American predominance in world affairs and declare American hegemony an indispensable element for a better, peaceful and prosperous world.” Under the present conditions of globalization, American hegemony has played a principal role in norm creation, as well as in maintaining the contemporaneous global security architecture. Whilst a considerable body of literature has deconstructed the notion that the terminology of ‘Hegemon’ applies solely to America any longer, I maintain that the US-made institutional structures, norms and regimes are part of its hegemonic influence. However with the rise of China such structures are increasingly under threat of dissolution, relative insignificance or even impotence. 

The Asian Infrastructure Investment Bank (AIIB), New Development Bank and the related Contingent Reserve Arrangement were spearheaded by the Chinese leadership under President Xi. These institutions validate Chinese attempts to alter the global financial architecture constructed by the Bretton Woods institutions. Over the past 15 years, China has experienced an eightfold increase in GDP, enabling it to serve as the primary  engine  of  global  economic  growth  in  the  early  21st  century. This economic power has enabled China to leverage its position as one of the most influential states in the world.  The recently concluded One Belt One Road (OBOR) forum in Beijing with the participation of heads of state from Europe to Africa encapsulates China’s rise in influence and soft power. 

At the forum President “ Xi announced an additional $124 billion in funding for the OBOR initiative, including loans, grants, and $8.7 billion in assistance to developing countries. According to Chinese state media, some $1 trillion has already been invested in OBOR, with anoter several trillion due to be invested over the decade.” Such actions juxtaposed against America’s shift away from the TPP and the ‘Pivot/Rebalance to Asia’ policy towards a form of nativist ‘economic nationalism’ serves to heighten fears of the decline of American influence in the global economic architecture.

China’s military   budget  grew  at  an  average  of 9.8 percent per year in inflation - adjusted terms from 2006 through 2015 and the People’s Liberation Army has recently been involved in counter piracy patrols, humanitarian assistance, disaster relief exercises, and sea lane security operations in the pacific and Indian ocean. China’s assertive actions in the South China Sea and East China Sea and its alleged threat of war to Philippines over oil drilling in disputed territories, emphasizes the rise of a rival hegemon to USA. American actions to stop China’s island building in the east china and South China Sea have proved futile. Moreover inconsistencies in US foreign policy have resulted in increased anxiety among the traditional allies of USA. Thus the American made global security architecture is also under increasing pressure - especially as China begins to assert its claims utilizing the 9 Dash Line ignoring the arbitration tribunal judgment. 

Contrast China’s rise to the USA and the West. Mounting budget deficits, slow growth in GDP, Western Investment ratios that pale in comparison to China’s recent investment projects in Asia, Latin America and Africa, the financial weaknesses and structural problems in the EU, decline in American competitiveness, and President Trump’s rhetoric which has led to the loss of US soft power have all challenged the American hegemonic position of late. The inability of the International Monetary Fund and International Bank for Reconstruction and Development to adequately support developing economies in avoiding economic malaise - post 2009; along with the rise of the economic superstructure - OBOR - demonstrates a shift in the global power dynamic. In the Theory of Hegemonic Stability: Changes in the International Economic Regimes Keohane argues that the decline of a hegemonic structure of power can be expected to presage a decline in the strength of corresponding international economic regimes. With the rise of China and the increased protectionist sentiment of an ‘America First Foreign Policy’ this is clearly discernable. However this also translates to the decline in import of the American made security architecture that characterized earlier decades. While this decline is not overtly perceptible today, cracks have already emerged. The question therefore continues to be whether China wishes to work within or outside the Western made global order.

Scholars such as Graham Allison claim that conflict between the nascent hegemon and USA will be inevitable – a form of Thucydides Trap between the two. Professor Joseph Nye Jr particularizes the possibility of a Kindleberger Trap emerging in the global order, if China does not take up the mantle of providing global public goods following the weakening and eventual demise of USA. Others believe that China will rise ‘peacefully’ as the new global hegemon provided that USA is willing to accommodate the intensifying national interests of China. At this stage it is still uncertain how China’s rise will pan out on a geospatial context. Consequently the coming decades bring substantial uncertainty to the world. 

Will the American hegemony crumble similar to the British in the 20^th Century or will an infusion of a robust US foreign policy mitigate this decline? Recently President Xi reiterated his support towards the process of a globalized community in Davos but the implications and fallout from the recent rise of populism, first in Latin America (with the Pink Tide movement) and then more overtly in Western Europe signals the pressures that exist on globalization. Regardless of our conjectures for these questions we can no longer doubt that the US hegemony is increasingly under threat and will continue to be in the years to come. Where China stands on the norms, institutions and regimes and to what degree the Asian Dragon alters these structures (and thereby the international order) will have significant ramifications on the forces of globalization and the global security architecture. What has transpired thus far leads to a mixed bag of apprehension and uncertainty that can only be answered in the years to come.

-        - Guest Commentary : Shakthi De Silva