Are China and the U.S. Nearing the Tipping Point?

An orthodox view in power transition theory would describe China as an increasingly assertive revisionist state that intends to challenge the incumbent world leader, the United States. Washington, meanwhile, has been viewed by some as more of a status quo power that intends to defend the international order it built and has dominated. These judgments are supported by examples: China’s behaviors in the East and South China Seas (some of which, it should be noted, have been reactive), as well as China's recent experiments with more institutional approaches, like the establishment of the Asian Infrastructure Investment Bank (AIIB). The latter is far more profound and significant as an example of China’s perceived challenge to the U.S.-led world financial system.

But this prevailing notion is more or less an illusion, a simplified binary oppositional view used to describe certain Chinese behaviors. This outlook, based on preconceptions, claims that China is inclined to be more revisionist than its neighbors or the United States, even when all parties are engaged in similar conduct.

It is true that China intends to change or at least suggest reforms to the international system, especially with regards to those rules which China was never truly involved in making. These attempts certainly include China’s suggestions of reforms to the World Bank, IMF, and other international multilateral institutions in which the United States, other Western powers and Japan, take leadership roles. But it should be noted that China is only one of many countries seeking to reform (we might say modernize) these institutions. An IMF reform plan, for example, was approved by the member countries in 2010 – but has not yet been implemented due to U.S. obstructionism.

Seemingly more solid charges of revisionism come from China’s “unilateral” and “expansionist” maritime behaviors, for example building the “Great Wall of Sand” in the South China Sea. But it is interesting that these same charges were not heard when other Southeast Asian countries occupied, inhabited, and even militarized a number of islands and islets in the same waters starting as far back as the 1970s. For example, since the 1970s, Vietnam has occupied 29 islets or reefs in the South China Sea and the Philippines has occupied eight. China occupies  seven. Yet it is China that is conveniently labeled a revisionist power. It fits into a neat narrative – that China is challenging the regional order with its assertive actions, that it is increasingly dissatisfied with its status in the current world system, and that it intends to revise the rules set by the United States.

But in truth, which is a more revisionist power, China or the United States? Don’t dismiss this question out of hand, as some readers may be inclined to do. Rather, consider the United States and China in the context of status quo vs. revisionist, without simply accepting the prevailing dogma.

According to power transition theory, in a gloomy scenario, as China rises economically, its dissatisfaction with its constrained status in the U.S.-led system also rises, and logically China begins to act more like a revisionist state. Meanwhile the United States counteracts China to defend its leadership role by protecting the current system. Seems perfectly logical.

Yet according to Ronald L. Tammen’s Power Transitions, the theory presupposes that “by definition, the dominant power is satisfied, and specifically so in the absence of open conflict challenging its dominance.” However, the dominant power can also become dissatisfied once it realizes that the system can no longer significantly offset challenges from the emerging power.

A dominant power is not dissatisfied with the fundamentals of the system, but with its operation in reality. Hence, the United States continues to emphasize the common norms, rules, values, and traditions shared by Washington and its allies in the West and the East, all of which serve as the foundation for the current order. However, the United States is constantly revising the way the current system works operationally, allegedly in pursuit of those values but (from a purely realist view) actually in response to China’s more assertive behavior. The Trans-Pacific Partnership (TPP) is one such example; another is the U.S. reformulation of its existing alliances to provide stronger deterrence against China. Even more telling, the United States is seeking to form new partnerships with states that do not share U.S. values, such as Vietnam, in a bid to uphold its regional dominance.

U.S. dissatisfaction comes from the fact that the world system, even though created and dominated by the United States, is neither static nor closed. It evolves and changes constantly – sometimes even against Washington’s will. At least for the United States, to maintain its leadership logically means constantly revising its strategies and policies toward the system and especially toward its perceived rival, a rising China. As China gains influence within the existing system, the United States becomes more dissatisfied with the current order.

The United States may dominate the system, but it does not completely control it, as the example of AIIB shows. If the AIIB is an example of China’s “revisionism,” how to explain the number of U.S. allies – including Australia, South Korea, and the United Kingdom – who gladly joined it?

China has long suggested reforms to institutions within the existing world financial system – and some of those reforms are strongly backed by U.S. allies and partners. But the U.S. has blocked many of China’s desired reforms, even while revising the existing rules, regulations, and relationships on its own accord in order to maintain its power status within the dominant system. Most cases of U.S.-driven changes are found at the regional or cross-regional levels, including the TPP and the Trans-Atlantic Trade and Investment Partnership (TTIP) proposed by the United States. The U.S. explicitly views these “high standard” trade agreements as a way of supplementing or even supplanting global trade rules mandated through the existed WTO. Seen in this light, U.S. policies and behaviors could be seen as no less revisionist than China’s “assertiveness.”

State behaviors are not matters of black or white. In the global arena, state behaviors are grey hybrids – a complex mix of drives, factors, and motivations direct state choices. Categorizing a rising China as revisionist does not mean we should overlook U.S. dissatisfaction with, and revision to, the world order and its alliance relationships.

Because an ambitious China indeed has been a beneficiary of the U.S.-led system, the United States now confronts a dilemma: What should the U.S. do about China? The U.S. can allow China to continue its rise and expansion within the dominant system and at some point in the future the system will have shift to suit China’s will over that of the United States. Or, the U.S. could continue to embrace China’s more active involvement in the system but impede its more ambitious behavior by creating new norms and rules – necessarily with help and coordination from traditional U.S. allies – that ultimately keep the U.S. at the helm of the system. The real problem for a dominant United States is not necessarily how to deal with an increasingly confident or revisionist China, but how much support it can gain from its allies to do so.

The situation we now face is even more concerning than the traditional view of a revisionist China and a pro-status-quo United States. We have a pair of major powers who both show a substantial degree of dissatisfaction with each other and the existing system – but they have shown little inclination to address the problem together. The situation has yet to deteriorate irreversibly and the probability of violent conflict is remains low, but as China scholar David M. Lampton put it in a recent speech at the Carter Center, “The tipping point is near.”