Institutional Balancing Between China and United States

 

Photo source: Foreign Policy

By Naveed Qazi | Editor, Globe Upfront

At the G‑20 summit in Bali in November 2022, President Joe Biden and President Xi Jinping met face‑to‑face and emphasised the importance of managing competition responsibly. As Ananth Krishnan reported for The Hindu, both leaders pledged to avoid military conflict and agreed to resume cooperation on issues such as climate change and global economic stability. The meeting underscored the recognition by both sides of the devastating consequences of war, even as they acknowledged that competition between their countries would continue.

This competition has increasingly taken the form of what scholars call ‘institutional balancing’. Unlike traditional military balancing, which relies on arms buildups and alliances, institutional balancing involves using international institutions and their norms to gain advantage. Some analysts have described this as another alarming axis of confrontation, but others, such as Kai He and Huiyun Feng writing in International Affairs, argue that institutional balancing can have positive outcomes, strengthening multilateral institutions and encouraging investment in public goods. It provides a way to compete without resorting to violence.

American leaders often frame competition with China in Cold War terms, seeing developments as hostile or destabilising. Yet if Washington and Beijing pursue institutional balancing constructively, the coming multipolar age could be more stable than the unipolar era that followed the Cold War. In fact, both countries have engaged in institutional balancing since the 1990s.

The United States used exclusive institutional balancing when it deliberately excluded China from negotiations on the Trans‑Pacific Partnership between 2008 and 2015. As Daniel C.K. Chow explained in the Chicago Journal of International Law, this exclusion was a calculated effort to contain China and limit its access to nearly forty per cent of the global economy.

The last thirty years of US‑China institutional balancing can be divided into two phases. The first, from the early 1990s until the 2008 global financial crisis, was marked by deepening interdependence and globalisation but remained essentially unipolar, with the assumption that the United States would retain greater influence. During this period, both countries used existing institutions, especially ASEAN, to pursue inclusive institutional balancing. The ASEAN Regional Forum was particularly useful to China, which insisted on non‑interference and blocked discussion of Taiwan since 1994. The United States also deepened ties with ASEAN, developing a strategic partnership in 2015 and hosting summits in 2016 and 2022. In 1998, encouraged by ASEAN and the US, China published its first national security white paper to meet ARF requirements for military transparency.

The second phase began after the 2008 financial crisis, which exposed weaknesses in US‑led capitalism and emboldened non‑Western economies to challenge US hegemony more aggressively. This phase has seen more exclusive institutional balancing, with both countries creating new institutions to exclude one another. In 2017, the US revived the Quad with Australia, India, and Japan. As Jasmine Moheb noted in China Focus, the Quad has since ramped up joint military exercises and launched initiatives in vaccine diplomacy, climate change, technology, and infrastructure, aiming to counterbalance China’s influence.

China, meanwhile, launched the Belt and Road Initiative in 2013, a vast network of infrastructure projects across more than 150 countries. The Council on Foreign Relations described it as a colossal undertaking, with investments surpassing $1 trillion, though some analysts warn of debt risks for participating states. China also revitalised the Conference on Interaction and Confidence Building Measures in Asia in 2014, promoting the slogan ‘Asia for Asians’ as a challenge to the US alliance system.

To counterbalance US power in Eurasia, China expanded the Shanghai Cooperation Organisation, originally founded with Russia in 2001. The SCO admitted India and Pakistan in 2017, Iran in 2022, and Belarus is expected to join soon, making it the largest regional organisation by population. As Britannica editors noted, the SCO has become a platform for China to promote a multipolar order and reduce reliance on US‑led institutions.

Taken together, these developments show that US‑China competition has moved beyond military confrontation into a new battlefield of institutions. While some view this as destabilising, institutional balancing can also strengthen global governance and provide a safer way to manage rivalry. The Bali summit in 2022 demonstrated that both leaders recognise the dangers of war and the need to compete responsibly. If they continue to channel their rivalry through institutions, the rest of the world may benefit from stronger multilateral frameworks and more investment in public goods, even as the competition itself remains intense.