Institutional Balancing Between China and United States


Photo source: Foreign Policy

By Naveed Qazi | Editor, Globe Upfront

During the G-20 summit in Bali in November 2022, President Joe Biden and Chinese President Xi Jinping emphasised the importance of responsibly managing the competition between their countries.

Recognising the devastating consequences of military conflict, both leaders pledged to avoid it. Nevertheless, even if they can avoid conflict, the two countries are locked in a competition that will probably extend into the near future. As they navigate through the tensions, the rest of the world will look on it nervously.

But there is a potential bright side to US-Chinese competition: the rise of ‘institutional balancing.’ Unlike in traditional military balancing, whereby countries seek to equalise their power through arms buildups and defense alliances, institutional balancing involves countries seeking advantage by using the norms associated with international institutions.

Some scholars have begun to characterise institutional balancing as yet another alarming axis of confrontation, even a form of war. But this approach to competition is not only less violent than warfare. It can, in fact, be healthy—strengthening international cooperation, forcing multilateral institutions to become more relevant and dynamic, and prompting more investment in public goods. Institutional balancing provides a way to compete responsibly without resorting to military conflict.

American leaders can be particularly tempted to think of any aggressive competition with the United States within a Cold War frame, wherein all developments are hostile or destabilising. However, if Washington and Beijing pursue institutional balancing in the right way, they could make the coming multipolar age better than the previous, unipolar one.

US and China are locked in a new kind of battlefield and at the same time, institutional balancing is not a new concept in global politics. Since the end of the Cold War, both the United States and China have pursued it to enhance their power.

The United States used exclusive institutional balancing when it intentionally excluded China from the 2008–2015 negotiations that resulted in the Trans-Pacific Partnership. By excluding China, the United States significantly limited China’s access to over forty percent of the global economy.
The last thirty years of institutional balancing between the United States and China can be understood in two phases. The first phase spanned the early 1990s up to the 2008 global financial crisis. Although that era was characterised by deepening economic interdependence and accelerating globalisation, it was essentially unipolar: the general assumption was that the United States would remain more influential than China.

During that phase, both the United States and China mainly used existing multilateral institutions, especially the Association of Southeast Asian Nations, to pursue inclusive institutional balancing. The ASEAN Regional Forum, in which the United States participates, was particularly useful to China. By insisting on a principle of non-interference, China has effectively blocked the ARF from addressing the matter of Taiwan since 1994.

The United States has also deepened its relations with ASEAN, developing a strategic partnership with the organisation in 2015 and hosting US-ASEAN summits in 2016 and 2022. As of 2019, ASEAN has become the favoured US diplomatic partner in its ‘Free and Open Indo-Pacific’ strategy. The United States also used the ARF as a specific means to engage China with the hope of socialising China into international society. In 1998, with the United States and ASEAN’s encouragement, China published its first white paper on national security in order to fulfill the ARF’s requirement to increase military transparency.

The second phase of US Chinese institutional balancing is still ongoing. After the 2008 global financial crisis exposed the weaknesses of US led free-market capitalism, non-Western and emerging economies began to challenge US hegemony more aggressively. This changed landscape led the United States and China to focus more on exclusive institutional balancing, creating new institutions to exclude and target each other. In 2017, the United States revived the Quad (Quadrilateral Security Dialogue) with Australia, India, and Japan, which had failed to gain traction a decade earlier. Thanks to this revitalised dialogue, in the last five years, Quad countries have ramped up their joint military exercises and announced a variety of initiatives in vaccine diplomacy, climate change, technology, and infrastructure.

China, meanwhile, pursued exclusive institutional balancing by creating or expanding institutions that leave out the United States. A chief example is China’s 2013 launch of the Belt and Road Initiative, a massive network of projects and investments to upgrade infrastructure in more than hundred countries at a projected total cost of up to $8 trillion.

The Conference on Interaction and Confidence Building Measures in Asia, a long-standing intergovernmental forum to promote cooperation, peace, and security in Asia, was stagnant for years until China rebooted it in 2014 to advocate for ‘Asia for Asians,’ a direct challenge to the US-led bilateral alliance system in Asia.

To counterbalance US power in Eurasia, China also sought to expand the influence of the Shanghai Cooperation Organisation, which it originally founded with Russia in 2001 to fight extremism, ethnic separatism, in the region. In 2017, with China’s encouragement, the SCO admitted India and Pakistan, making it the world’s largest regional organisation in terms of the population it covers. Iran was admitted in 2022, and Belarus is expected to join in 2023.


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