Keywords

Introduction

Today, global governance and the world order are facing challenges from slower economic growth, global warming, pandemics, supply disruptions, food and energy insecurity, and more volatile financial markets—all coupled with geopolitical rivalry and deep divisions among great powers. These various global crises have dimmed the possibility of progress and prosperity worldwide. The world has also been thrust into a fraught period of geopolitical realignment due to the war in Ukraine, creating a deep divide between a united West against non-Western nations, a trajectory that could lead to a gradual demise of multilateralism and in turn that of the world order. These shocks have endangered the social and political stability in some countries while weakening the ability of the world to confront its foremost long-term challenge: climate change.

Although the strategic and geopolitical rift began with trade (be it global or bilateral), Covid-19 and its lingering effects triggered and intensified US−China strategic competition and sent their bilateral relations into a tailspin. Geopolitical rivalry deepened further when China’s policies for achieving greater self-reliance in advanced technology presented additional momentum to trends in the US and some other Western nations leading to further mistrust of China. Chinese companies were excluded from markets and prevented from installing their technologies. As a result, the process of decoupling the economic, diplomatic, military, and ideological relations have intensified. The ensuing blame game has created enduring resentment on both sides that could influence mutual policies across a whole range of issues for the foreseeable future.

It was only a couple of years ago, when frequent references to G-2 (China–US) bilateral economic cooperation were the slogan of the day for policy makers and political analysts. Today—and just a short while later—the talk is about “decoupling.” The Anti-China hawks are busy destroying all bridges that had linked the two countries on scientific, technological, and economic matters. The US limits on exports to China of high-end technologies and semiconductors have targeted the growth of the technological capabilities of industries that China has identified as its highest priority. Restrictions on Chinese digital and cyber telecommunication facilities are indicative of growing political tensions between the United States and China over the past few years. In this context, Covid-19 should be considered a major cause of severe breakdown in trust, leading to the present geopolitical contests.

This deepening division was reflected recently in a decision by the United Nations Security Council—where the five members with veto powers could no longer find a like-minded approach on important security matters. This was also the case during the meeting of G-20 Finance Ministers in Delhi in late-February, where due to objections to certain wording by China and Russia, no agreements on a final communique could be reached.

Pierre-Olivier Gourinchas, the IMF’s chief economist, described it as a sudden geopolitical shift that “reveals hidden underlying fault lines.” He warned of a world fragmenting into “distinct economic blocs with different ideologies, political systems, technology standards, cross-border payments and trade systems, and reserve currencies.”

Elizabeth Economy, author of a new book called The World According to China, argues that Beijing is aiming for a “radically transformed international order” in which the US is in essence pushed out of the Pacific and becomes merely an Atlantic power. Since the Indo-Pacific is now the core of the global economy, that would essentially make China “number one.” This is a very different game—it is now a geopolitical contest between the world's number one power, the United States of America, and the world's number one emerging power, China!

Rush Doshi, a China scholar working in the White House, makes a similar argument in his book, The Long Game, where he cites various Chinese sources in making the case that, “China is now clearly aiming for American-style global hegemony.”

In a Fragmented World can a Unipolar World Survive?

Events of the early 21st century, such as the unexpected attacks on the World Trade Center in NYC on September 11, 2001, marked a turning point after which the US seemed to modify its principles of democracy and freedom by practicing surveillance on its own citizens as well as the leaders and people of other countries. The financial crisis of 2008 intensified assumptions about the impending decline of America’s might, and its unipolar supremacy.

Considering this background and rapidly advancing Asian countries, discussion of America’s decline began, eliciting feelings of triumph and concern (depending on one's preferences) among observers. It is worth mentioning that much of the security and institutional architecture of the current world order emerged as World War II ended.

In the aftermath of World War II, the UN, the World Bank, and the IMF were founded, with their headquarters in the US. The General Agreement on Tariffs and Trade (GATT) came into force in 1948, NATO was created in 1949, the US-Japan Security Treaty was signed in 1951, the European Coal and Steel Community (the predecessor of the EU), was also founded in 1951. After the end of the cold war, rival Soviet-backed institutions such as the Warsaw Pact collapsed, and NATO and the EU expanded up to the borders of Russia. China joined the World Trade Organization in 2001.

The question now is whether Russia’s and China’s desire for a “new world order” will also need a war to come to fruition and is Ukraine’s destiny a decisive turning point toward that objective?

Barely recovered from the crises of the early 21st century, the US upheld the desire to maintain its position as the world’s only superpower even with the cost of undermining the power of its competitors. These “efforts” have been making the world a more turbulent place in recent years. After the 9/11 attacks on New York and Washington (implicated Osama Ben Laden), NATO invoked Article 5—its mutual-defense clause—and invaded Afghanistan demonstrating America’s willingness and ability—if required—to transform the world by force. Unanimity within the G-7 and EU to assist Ukraine in its conflict with Russia is yet another example of the “America is back again” slogan in the global governance.

In recent years, apprehensive about the rise of China, the US has become increasingly determined to stop China as a rival. In doing so, the US has chosen a more protectionist policy, prioritizing self-sufficiency over global inter-dependency. Could this new paradigm shift give rise to a reconsideration of multilateral agreements, or lead to a goal of unilateral political superiority at any cost? What will this mean for the current model of global governance? Could it feed into the widespread doubt about the adequacy of the present world order?

In contrast, China has used its trading power to expand its global influence. In 2013, Beijing launched the Belt and Road Initiative (BRI) to fund infrastructure that stretches into Central Asia, Africa, Europe, and the Americas. In 2015 China also launched the Asian Infrastructure Investment Bank (AIIB). The AIIB is a multilateral financial institution that invests in infrastructure projects and other productive sectors across Eurasia. In addition, the establishment of the Regional Comprehensive Economic Partnership, a vast new free-trade area in the Asia-Pacific with several American strategic allies such as Japan and Australia, created easy accesses to the Chinese market.

Since then, as part of its goal to return China to its former glory, the government has adopted a global governance strategy focusing on four major issues: global health, Internet governance, climate change, and development finance. In October 2017, plans to make China a “cyber superpower.” were launched, helping the country to become a leader in the global Internet governance by promoting the idea of “cyber sovereignty.” On climate change, China has shifted from resisting international cooperation on climate change to supporting such cooperation. China’s activism at home has been matched by new activism on the global stage, where it has worked with existing international institutions and has been a leader on climate change. In 2015, the United States partnered with China to call for a strong, legally binding treaty that ultimately became the Paris Agreement. Now Beijing is trying to save the agreement as others, including the United States, are shifting their focus.

More subtly, China has moved on a series of foreign policy initiatives to create alternative structures for international cooperation, particularly with the developing countries. In conflict resolution, China’s 12-point Position Paper (released on Feb 24, 2023) outlines a political settlement of the Ukraine crisis. Citing positions that China has long held in international fora, China offers several useful insights into the role it wishes to play in the international arena as well as its positioning with respect to global dynamics of power. In the context of this plan, China invites all countries to strictly uphold the sovereignty and independence and territorial integrity of all and choose dialogue and negotiation in resuming peace talks. China signaled its willingness to continue to play a constructive role in these negotiations. The document openly condemns the use of nuclear weapons and calls for a military de-escalation between the warring parties.

President Volodymyr Zelensky welcomed this paper as “an important signal that China’s willingness to participate in a peace formula” and volunteered to meet with President Xi. On 26 April, President Xi Jinping spoke with President Volodymyr Zelensky on the phone. The two sides exchanged views on China–Ukraine relations and the Ukraine crisis.

Can Globalization Be the Savior of a Fragmented World?

Today, notions of global governance, globalization and world order have become rather closely connected. Rapid globalization for decades, resulted in increasing economic integration and inter-dependence among countries, leading to the emergence of a global marketplace. Multinational companies manufactured products in many countries and sold them all over the world. Money, technology, and raw materials—breaking international barriers—permitted developed economies to integrate with less developed economies through foreign direct investment, elimination of trade barriers, and economic reforms. However, globalization is being challenged by widely differing expectations, standards of living, cultures and values, legal systems as well as unexpected global cause and effect linkages.

Globalization has given rise to inequality, growing social divisions and a deepening economic disparity with an end game of an unavoidable backlash most visibly through political manifestations around the globe. It has prompted populists, extremists, and nationalists around the world to condemn multilateralism, globalization, and the current world order as the sources of inequality.

Many analysts believe that rising populism in the US and Europe is a result of and is enhanced by the persistently widening income and wealth gap due to the disparate gains between capital and labor. These are the root causes that continue to feed populist anger against elites by electing Donald Trump to the US presidency and the UK’s vote to leave the European Union. Populism and nationalism were driving policy initiatives behind “make America great again” and the Brexit campaign that focused on resurgence of national lost industries and traditional jobs. In such circumstances, fake and alternative truths influence people’s opinion, and the social media has become a dominant factor in shaping the dynamics of the world politics and social order of the day.

Taking advantage of the perceived and actual flaws in the current world order and governance, and their impact on the combination of institutions, ideas and power structures, the competitors joined forces determined to create a new world order that would better accommodate their differing interests. Two features of the current world order are of their particular concern—“unipolarity” and “universality.” To put it more simply, they believed that the current arrangements gave America too much power. For more than two millennia, China had seen itself as one of the dominant actors in the world. The concept of “zhongguo”—the Middle Kingdom, as China calls itself—is not simply geographic. It implies that China is the cultural, political, and economic center of the world. This Sino-centrist worldview has in many ways shaped China’s outlook on global governance—the rules, norms, and institutions that regulate international cooperation.

Yet China also now seeks to shape the global governance system more actively, to advance its model of political and economic development. This development model is characterized by extensive state control over politics and society, and a mix of both market-based practices and statism in core sectors of the economy.

President Xi Jinping has often called for more shared control of global governance. He has declared that China needs to “lead the reform of the global governance system with the concepts of fairness and justice.” The terms fairness and justice signal a call for a more multipolar world, one potentially with a smaller role for the US in setting international rules.

Joining forces with Russia, the two countries have become determined to change “unipolarity” in global governance. Fyodor Lukyanov, a Russian foreign policy thinker, believes that unipolarity “gave the United States the ability and potential to do whatever it saw fit on the world stage.” He argues that “the new age of American hegemony was ushered in by the Gulf War of 1991—in which the US assembled a global coalition to drive Saddam Hussein’s Iraq out of Kuwait.” (FT.COM) The Gulf War was followed by a succession of US-led military interventions around the world—including in Bosnia and Kosovo in the 1990s. NATO’s bombing of Belgrade, Serbia’s capital, in 1999, has long formed part of Russia’s argument that, “NATO is not a purely defensive alliance.”

America’s defeat in Afghanistan, symbolized by the chaotic withdrawal from Kabul in the summer of 2021, has given the Russians hope that the US-led world order is crumbling. Lukyanov argues that the fall of Kabul to the Taliban was “no less historical and symbolic than the fall of the Berlin Wall.” Influential Chinese academics are thinking along similar lines. Yan Xuetong, Dean of the School of International Relations at Tsinghua University in Beijing (President Xi’s alma mater), writes that “China believes that its rise to great-power status entitles it to a new role in world affairs—one that cannot be reconciled with unquestioned US dominance.”

Like Lukyanov, Yan believes that “the US-led world order is fading away. In its place will come a multipolar order.” The echo of this assumption could be heard from President Xi when he referred in some speeches that “the East is rising, and the West is declining.” Since becoming China’s Communist Party leader a decade ago, Xi has adopted a more assertive stance on foreign relations. In October 2017, he told the party’s 19th congress “it is time for us to take center stage in the world.” During the 20th Congress meeting, he codified the new foreign policy doctrine with a 24-character formula that included the “dare to fight” phrase mirroring Deng Xiaoping's strategy. For Russia and China, the creation of a new world order is not simply a matter of raw power; it is also a battle of ideas. While the Western liberal tradition promotes the idea of universal human rights, Russian and Chinese thinkers make the argument that different “civilizations” should be allowed to develop with different doctrines. In a similar vein, Beijing argues that a fusion of Confucianism and Communism means that China will always be a country that stresses collective rather than individual rights.

The new world order that Russia and China are demanding would be based on distinct spheres of influence. The US would accept Russian and Chinese domination of their neighborhoods and would abandon its support for democracy that might threaten other regimes.

New Paradigm—New Global Governance? Problems of the Transition Period and the Balance of Power

Multilateralism, in both its global and national versions and across the whole range of issues, is also under severe strain and may be subjected to continued interpretation, revision, and rewriting. An inward-looking US, a militarized Europe, and a stagnant Japan and Korea could provide fertile ground for the rise of economic giants such as China and India in Asia as well as the emergence of several developing states from Mexico to Malaysia and Indonesia, which may wish to take leading positions in the world of the future. Taking this development into account, along with the economic and financial powers of some multinational companies and private sectors, any new model of governance will be subject of scrutiny and doubt.

With the expectation of a US demise, the search for a new balance of power, manifested in the active forming of various alliances and coalitions of countries and their associations, has already begun. Changes in the global balance of economic power could create objective conditions for a reorganization of the existing world order. However, it will not necessarily result in an automatic change in military and political balances. In this sense, economics replaces politics as a driver of global change.

If and when the US loses its privileged position as the world primary power, needs will arise for a comprehensive search for new patterns. A different and new world order may result in a world without a hegemon, but with several centers of power and influence, of which the United States is likely to be the most important. But it would only be “first among equals” and not a superpower.

The US at present, is involved in too many aspects of global leadership and this is a challenge not easy to overcome. It is impossible to predict where the world will be twenty years from now, but the question remains—can the “sunset” of the USA turn into a new “sunrise” for others? The shape of a new world order in future will strongly depend on who will lead in technology, especially if innovations are translated into military supremacy.

Today developing world such as India invests more and more into technology with the hope to have a seat at the global governance table. For them, a credible new global order would entail:

  1. 1.

    A solid balance of power and interests.

  2. 2.

    New models of a supranational government and coordination of global processes.

  3. 3.

    New ideologies to replace the idea of the universal democracy at all levels with a new paradigm and new cooperation patterns.

  4. 4.

    Avoiding fragmentation that could slow increased global integration and foster localization in production, trade, finance, and technology.

At the 2023 World Economic Forum's (WEF) annual meeting in Davos, IMF chief economist Gita Gopinath came out swinging and alerted business leaders and government functionaries of the dangers of fragmentation and deglobalization. IMF Managing Director Kristalina Georgieva went further. On February 5, on CBS’ 60 Minutes program she said that “if world trade slips, global GDP would decrease by USD 1.5 trillion or 1.4%, and this could be as high as 3% in Asia.”

Conclusion

Globalization has given rise to significant connections in the world but also a greater risk of fragmentation of international relations. While some may consider the phrase “fragmented globalization” a dichotomy, but it could lead to strengthening of regional trade blocks and with like-minded partners leading to a multipolar world and not necessarily a “de-globalized” one.

Globalization is overwhelmingly a technological and economic process while fragmentation is primarily political in nature. Even though they take place in different spheres, it is often assumed that there is a relationship between the two.

Trade systems are at risk of fragmentation not only due to geopolitical rivalries, but also because they are not being updated to meet the biggest challenges facing humanity from climate change to future pandemics.

Rebuilding the global economy after Covid-19 will require rebuilding trust in free trade and support of increased capital flows, especially for developing and emerging nations. China’s contribution to global governance has so far focused mainly on economic cooperation. However, along with its rising international status, China has begun to shoulder more responsibilities in narrowing the gap between rich and poor, promoting South-South Cooperation, and other global affairs. These efforts have played a key role in lifting many out of poverty over the years.

As its economy grows, and as it was mentioned earlier, Beijing is taking a more active role in global governance, signaling its potential to lead and to challenge existing institutions and norms. China has become a powerful force in global governance. Increasingly, however, its efforts appear to be deepening divides with other countries, particularly democracies that are committed to existing norms and institutions. Ultimately, this divide could make it harder for states to collaboratively address major international challenges, such as global health, climate change, and development finance that require engagement from all nations, in the form of international cooperation to rebuild the rules-based environment, as well as domestic policies that minimize the uncertainties associated with country-specific political and economic risks. As a recent McKinsey Global Institute report reminds us, "no region is close to being self-sufficient." Meanwhile, environmental collapse also threatens to exacerbate social tensions and political polarization, democratic decline, and geopolitical splits that drive a wedge between and within countries.

Given the fact that the rare confluence of geopolitical, economic, and technological forces now confronting the world may reverberate for generations, I wish to end this article with a quote from Jie Dalei, Professor of International Studies at Peking University: “One does not have to change [or] become the other, to be able to coexist. In fact, the existence of multiple competitive ideologies has been normal throughout most of human history. The dominance of one ideology in the global marketplace of ideas is the exception rather than the rule.”