China’s Leadership Role(s) in a Potentially Multi-Polar World

Whether we like/accept it or not, the world is moving toward a multi-polar leadership framework as opposed to the US-centric one we have today. Why? Simply because there are many forces pushing the world in such as direction rather than there just being one reason which explains everything, forces such as:

1. The United States itself taking steps back from it numerous leadership positions, whether they involve environmental issues (with the US withdrawal from the Paris Agreement being emblematic in this respect), military costs (with US leaders being more and more vocal when it comes to asking let’s say European NATO members to increase their defense spending) or other dimensions. Simply put, the various leadership positions of the United States come at great financial (and subsequently political) costs. These costs, in tandem with the macroeconomic situation of the United States (which went from representing the world’s #1 creditor after World War II, with 2/3 of the global gold reserves, to representing the world’s #1 debtor nation in nominal terms at this point), make the general public in the US and politicians alike become increasingly less willing to foot the proverbial bill
2. Certain economies, most notably the Chinese one, becoming too large for them not to want to assume greater geopolitical roles. As it is, the Chinese GDP is the world’s #2 one in nominal terms despite the fact that the GDP Per Capita is almost six times lower in China than in the US. Should China continue catching up with Western nations on a GDP Per Capita basis until (quasi-)parity is reached, China will inevitably not only become the dominant player in terms of nominal GDP as well but the dominant player by a very wide margin
3. Historic mega-cycles. Whether we’re talking about Continental European powers, the United Kingdom or the United States to give relatively recent examples on a long-term macro scale, the influence of various nations rises and falls as time passes, with Oriental powers being let’s just say historically due a major pendulum swing-driven recovery

… the list could go on and on.

It’s important to note that these things don’t exactly happen overnight. But, one step at a time, whether it’s becoming a member of the World Trade Organization in 2001 or having the Renminbi included in the International Monetary Fund’s Special Drawing Rights (SDR) basket of currencies in 2016, China is most definitely getting there.

Once again, however, the same principles as with the United States apply: with increased leadership roles come increased leadership-related expenses. Or, in other words, geopolitical power doesn’t come cheap. For example, China’s Belt and Road Initiative through which it will enhance its geopolitical influence through international infrastructure spending, will come with a price tag in the $4 to $8 trillion range by 2049.

As such, China most definitely doesn’t want a quick and abrupt transition to a multi-polar world because it would not be in its best interest with respect to financial stability. If we embrace a multi-generational timeframe, however, we cannot help but realize that it’s a matter of “when” rather than “if” multi-polar worldwide leadership scenarios become a reality.

To conclude, it becomes abundantly clear that China wants its geopolitical influence to increase and is also willing to pay the (steep) costs associated with such goals. However, at the same time, in the spirit of its long-term macroeconomic stability, it is just as interested as the United States and other major players in making sure nothing happens in an abrupt manner. One small role at a time, China is taking over leadership positions that the United States is stepping away from and as time passes, it is quite likely that some sort of balance is found in a multi-polar leadership framework. At the end of the day, everything can be summed up by asking and answering three questions:

Can China afford to be one of the top parties involved?

Yes, even if not right away.

Does it want to become one of the top geopolitical players?

Most definitely.

Is it possible for a multi-polar leadership framework to emerge that doesn’t include China or for the US-dominated status quo to continue indefinitely?

Yes, but highly unlikely.