China’s Quest for Global Economic Governance Reform

Abstract

This paper attempts to characterize China’s approach to global economic governance during the Xi Jinping era, and to provide details on how it is playing out. One finding is that China has moved away from the period of “hiding one’s strength and biding one’s time” and is now acting in a more norm-making and agenda-setting role in which it is seeking largely incremental change. Another finding is that China is doing these things through a variety of global governance forms such as inter-governmental organizations with a fairly highly degree of formality, looser international organizations that have weaker implementation capacity and unilateral initiatives which put China very much in a leadership position. Findings are based on an examination of major activities of the Xi period, including hosting the G20 leaders’ summit in Hangzhou, China, joint creation of new multilateral development banks, and the Belt and Road Initiative. The paper also touches on motives for China’s activities, including hedging against adverse developments in the international system, greater wealth, and a global power vacuum that has arisen with the rise of nativist and populist movements in the West, and possible constraints to the realization of China’s objectives such as slowing domestic economic growth and a backlash against China’s globalization, which could intensify.