Salzburg Global Fellow Joshy Paul writes about the United States' previous example of democracy and China's expanding influence
This op-ed piece is part of a series, written by Fellows of the Salzburg Global Seminar program "Democracy on the Front Lines: Polarization, Culture and Resilience in America and the World."
When World War II ended, the United States took the initiative to rebuild a new world order – the liberal international order. However, it was not something that the U.S. had newly created but instead something they sought to translate its domestic practices such as democracy, market economy, rule of law, freedom and prosperity, and respect for global commons at the international level.
Indeed, this has become the standard norm for modernity and the U.S. became the champion of liberal democracy, and the countries joined with the western system have embraced democracy as their domestic systems. Previously, many of them were imperial powers, who had no experience of democracy. Similarly, the newly independent countries have also adopted democracy as a form of government. Some have survived, while many have fallen into authoritarianism. With the end of the cold war, former Soviet bloc countries joined the league of democracy, and now the U.S. has formed a democratic alliance comprising India, Japan, and Australia, popularly known as Quad (Quadrilateral Security Initiative) against authoritarian China.
The world economic system has been preserved by the unwavering economic leadership of the U.S., starting with the Bretton Woods systems, then with globalization, and later free and open global order to challenge the Communist-Socialist forms of Russia and China. However, after the 2008 financial crisis, there has been a tendency toward an inward-looking approach by the U.S.. This was started by the Obama administration but heightened by Donald Trump's “America first” policy. This shattered the confidence of other democracies who entrusted great faith in the U.S. to drive the global economy with a free market and free trade principles. However, a big question is naturally emerging in various parts of the globe: can the U.S. lead the global economy the way it did during the second half of the 20th century?
On the other side of the spectrum, China is expanding its economic influence across the globe with its latest strategy of Belt and Road Initiative (BRI) where state-owned enterprises with government funds are the investors. Previously, the U.S. set the standards and rules globally which strengthened U.S. multinational corporations throughout the world, while with the BRI Beijing is looking to promote a "Chinese-led globalisation" with Chinese rules and standards. This results in two competing models- a liberal and market-oriented economy of the West and a state-owned enterprises-led authoritarian model of the rest led by China, reinvigorating the old East-West debate.
Importantly, middle-income countries have been looking at the U.S. for market and technology to strengthen their economic position. For instance, the East Asian tiger thrived economically due to the beneficial trade policies of the U.S. in which they found a good market for their finished and semi-finished products. This is now threatening because of the Trump administration’s “America first” policy, while the Biden administration has not reverted, focusing on “China decoupling”, a trade restrictive practice. President Trump withdrew from the Trans-pacific Trade Partnership (TPP), but the Biden government has indicated it had no plans to join the new trade forum Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), formed by the TPP members, barring the U.S.. The new Indo-Pacific Economic Framework (IPEF) promoted by President Biden to counter China in the Indo-Pacific has failed to generate enthusiasm among middle-income countries, particularly in Southeast Asia, because it gives no incentives for them to find the U.S. market.
The world expects the United States to be a good rule maker, facilitator, and promoter, that benefits all sections of society across the globe. However, this belief has changed. The more the U.S. retreat from the international liberal economic order, the greater China increases its influence in the rest of the world.
Joshy Paul is currently a research fellow at the Centre for Airpower Studies (CAPS), New Delhi. At the CAPS he is focusing on India and Major Powers, US-China relations, and US and Asia. He has seventeen years of research-cum-academic experience on Asian Security, East Asian Affairs and Maritime Security of the Indo-Pacific. Before joining CAPS, he has been an Assistant Professor at the Department of International Studies, School of Law, Christ University, Bangalore, and also with a premier naval think tank, National Maritime Foundation, New Delhi. He has published a number of articles in reputed journals which include India Review, South Asian Survey, International Studies, Air Power Journal, and Maritime Affairs.
