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Hegemonic transition in East Asia? The dynamics of Chinese and American power

MARK BEESON

Review of International Studies / Volume 35 / Issue 01 / January 2009, pp 95 - 112

DOI: 10.1017/S0260210509008341, Published online: 08 January 2009

Link to this article: http://journals.cambridge.org/abstract_S0260210509008341

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MARK BEESON (2009). Hegemonic transition in East Asia? The dynamics of Chinese and American power. Review of
International Studies, 35, pp 95-112 doi:10.1017/S0260210509008341

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Review of International Studies (2009), 35, 95–112 Copyright  British International Studies Association
doi:10.1017/S0260210509008341

Hegemonic transition in East Asia? The

dynamics of Chinese and American power
MARK BEESON*

Abstract. The ‘rise of China’ is seen by some observers as a precursor of inevitable hegemonic
competition in East Asia. At the very least, it seems likely that China’s influence in East Asia
will grow at the expense of the United States. Whether this will eventually amount to a form
of ‘hegemonic transition’ is far less clear. It is, therefore, an opportune moment to consider the
relative strengths and weaknesses of China and the US in East Asia. This paper suggests that
the nature of hegemonic competition and transition is more uncertain and complex than some
of the most influential theoretical understandings of hegemony would have us believe.

Introduction

The ‘rise of China’ is certain to be one of the most important features of, and
influences on, the international system in the twenty-first century. The opening-up of
the Chinese economy under the leadership of Deng Xiaoping in the late 1970s
triggered a remarkable and unparalleled economic expansion that is affecting both
the People’s Republic of China (PRC) itself and the region of which it has historically
been such a central part. This rapid recent transformation in China’s economic
fortunes has not been greeted with universal enthusiasm, however. On the contrary,
for some prominent observers of international affairs, especially in the United States,
the rise of China is a harbinger of inevitable and unwelcome change. John
Mearsheimer, for example, argues that ‘a wealthy China would not be a status quo
power but an aggressive state determined to achieve regional hegemony’.1 The
implication as far as American foreign policy is concerned is clear: China should be
contained, its economic development slowed, and the concomitant decline in the
position of the US should be delayed for as long as possible. While perspectives such
as Mearsheimer’s have not been the only influence on American foreign policy,2 they
reflect a prominent school of thought in the US and elsewhere which believes that the
re-emergence of China as a ‘great power’ at the very least presages an hegemonic

* I would like to thank RIS’s reviewers for their valuable comments and suggestions.
1
John J. Mearsheimer, The Tragedy of Great Power Politics (New York: W.W. Norton, 2001),
p. 402.
2
There is another, currently less influential school of ‘panda huggers’, which believes that China
should be engaged rather than contained, and which is optimistic about the pacific influence of
greater economic interdependence on Chinese foreign policy. See David Shambaugh, ‘Containment
or engagement of China? Calculating Beijing’s responses’, International Security 21 (1996),
pp. 180–210; International Herald Tribune, 5 October 2005.

95
96 Mark Beeson

transition in East Asia, if not outright conflict as the US and China struggle for
dominance.
There is, of course, nothing new about such views. The idea that hegemonic
competition and transition are inescapable, cyclical features of the inter-state system
has been suggested by scholars operating from a number of perspectives, some of
which are briefly considered in the first part of this article. There are, however,
grounds for questioning whether such predominantly state-centric analyses capture
the complex nature of ‘China’s’ incorporation into the contemporary international
order, or of the multi-dimensional nature of ‘American’ power either. For example,
although it has been the growth of mainland China’s economy that has attracted
most attention of late, the possible emergence of a ‘greater China’ that incorporates
Taiwan, Hong Kong and the fifty million or so ‘overseas Chinese’ in Southeast Asia
highlights the potentially transnational nature of Chinese influence and power.3
Similarly, while it has become increasingly plausible and commonplace to argue that
American influence and power are inexorably waning,4 the US retains an enduring
capacity to influence international economic, political and cultural practices in ways
that are not captured easily by an exclusive focus on foreign policy or strategy.5
The possible limits of exclusively state-centric analyses notwithstanding, examin-
ing the prospects for hegemonic transition in East Asia remains a useful exercise
for a number of reasons. First, it provides a framework within which to explore the
comparative merits of the contending theoretical explanations of the political,
economic and strategic changes currently underway in East Asia. Second, it
highlights the relative strengths and weaknesses of China and the US, and illustrates
the complex, frequently contradictory and paradoxical, nature of their growing
interdependence. Finally an analysis of ‘China’s rise’ suggests that whatever merit
various theories of hegemonic transition may have had in the past, they may all need
to be rapidly rethought: the sheer scale of China’s economic development and the toll
it is inflicting on the natural environment mean that its continuing rise is anything but
assured. On the contrary, China’s embrace of rapid capitalist development – a
development which might have been seen as an unambiguous long-term manifesta-
tion of American hegemony and structurally embedded influence – may prove highly
destabilising and unsustainable; but not necessarily for traditional reasons of great
power politics.
Consequently, after considering how hegemonic transitions have been understood
theoretically, I explore the way in which China’s rise is affecting strategic relations.
I suggest that American military might is less valuable than it once was, and this has
given added significance to China’s growing economic power. China is attempting to
capitalise on this and play an active regional leadership role in East Asia. In the
course of the discussion I compare China’s foreign policy with that of Japan’s, a
country that also had the economic capacity to play a prominent regional role, but
which failed to do so, primarily because of its continuing subordination to the US.
China, by contrast, has no such inhibitions. And yet, the East Asian experience
suggests that historically-grounded expectations of linear hegemonic progress are

3
Y.-W. Sung, The Emergence of Greater China: The Economic Integration of Mainland China,
Taiwan and Hong Kong (Basingstoke: Palgrave, 2005).
4
See, for example, Chalmers Johnson, Nemesis: The Last Days of the American Republic (New York:
Metropolitan Books, 2006).
5
Joseph S. Nye, The Paradox of American Power (Oxford: Oxford University Press, 2002).
 The dynamics of Chinese and American power 97

being undermined by rapidly emerging, and possibly implacable environmental

constraints. Paradoxically enough, therefore, an exploration of the possibilities for
hegemonic transition highlights both the limitations of some of our most influential
theoretical paradigms, as well as the profound, possibly insurmountable practical
limits to nationally-based rivalries.

Theorising hegemony

Expectations that East Asia would generate rising powers and become the site of a
process of hegemonic transition are not new. What is relatively novel, is the idea that
China, rather than Japan, might be the East Asian nation that achieved this. As
recently as the 1990s, many observers confidently expected that Japan would
overtake the US to become the world’s largest economy and assume a political status
and influence that matched its economic weight, fundamentally reconfiguring East
Asia’s intra- and inter-regional relations.6 Japan’s failure to assume this position tells
us something about the respective nature of China’s rise, America’s enduring power,
and the character of hegemony more generally. Before considering this in any detail,
however, it is useful to illustrate some of the contrasting ways hegemony has been
understood.7
One of the most influential and enduring conceptions of hegemony and hegemonic
transition emerged from the realist tradition, and it consequently shares many of that
paradigm’s well known strengths and weaknesses.8 Robert Gilpin, perhaps the
foremost exponent of this model, claimed it is ‘the differential rate of change between
the international distribution of power and the other components of the system that
produces a disjuncture or disequilibrium’.9 Such disjunctures – especially changes in
the relative economic standing of different states – undermine the balance of power,
introduce instability and tension, and encourage rising states to try and transform the
international system to reflect their interests. In this reading, conflict is inevitable as
declining powers will seek to resist a process that inevitably diminishes their relative
position.
And yet recent East Asian history suggests that there is nothing preordained about
the way such relationships will develop or about the impact of economic, political or
strategic power: Japan’s post-war subordination to the US is markedly at odds with
the expectations of realists and serves as a reminder that international relations in the
East Asian region might not follow a universal template.10

6
See, for example, Barry K. Gills, ‘The hegemonic transition in East Asia: A historical perspective’,
in S. Gill (ed.), Gramsci, Historical Materialism and International Relations (Cambridge: Cambridge
University Press, 1993), pp. 186–212.
7
For a more detailed discussion of these issues, see M. Beeson, ‘American ascendancy:
Conceptualising contemporary hegemony’, in M. Beeson (ed.), Bush and Asia: America’s Evolving
Relations with East Asia (London: RoutledgeCurzon, 2006), pp. 3–23.
8
See, Jeffrey W. Legro and Andrew Moravcsik, ‘Is anybody still a realist?’ International Security, 24
(1999), pp. 5–55.
9
Robert Gilpin, War and Change in World Politics (Cambridge: Cambridge University Press, 1981),
p. 48.
10
Christopher W. Hughes and Akiko Fukushima, ‘US-Japan security relations: Toward bilateralism
plus?’, in E. S. Krauss and T. J. Pempel (eds), Beyond Bilateralism: US-Japan Relations in the New
Asia-Pacific (Stanford, CA: Stanford University Press, 2004), pp. 55–86.
98 Mark Beeson

To understand why, and how this might affect China, it is necessary to say
something about the nature of American hegemony and the specific circumstances in
which it consolidated after the Second World War. In this context, East Asia was a
key arena in which the rapidly escalating struggle with the Soviet Union would be
played out. Significantly, however, and in sharp contrast to the experience of Western
Europe, American policy in East Asia was preoccupied with establishing a series of
bilateral, ‘hub and spoke’ security relationships with the individual states of the
non-communist parts of East Asia,11 rather than the sort of integrated, region-wide
order that eventually underpinned the development of the European Union. The
notably different treatment of Asia’s newly independent or recently defeated states
not only reflected American policymakers’ very different views about European and
Asian political elites, but it profoundly influenced the sort of intra- and inter-regional
relations that emerged over the longer-term in the context of American hegemony.12

The American way of hegemony

‘American hegemony’ is distinctive and multi-dimensional in ways that merit spelling

out. As far as East Asia was concerned, a preoccupation with containing the
perceived threat of communist expansion not only gave a defining rationale to
post-war American policy, but it directly underpinned the remarkable renaissance of
Japan and the wider East Asian ‘miracle’, of which Japan’s economic development
was such a central, calculated and strategically pivotal part.13 Without American aid
and investment, there is no doubt that East Asia’s remarkable development would
not have occurred at the pace it did.14 Equally importantly, without an initial
willingness on the part of the Americans to turn a blind eye to the sorts of frequently
authoritarian,15 neo-mercantilist, state-led development strategies Japan pioneered
and which others – including China – have attempted to emulate, it is also clear that
the region’s development would not have occurred in the manner that it did. That the
US has been of late less willing to tolerate deviations from the ‘Washington
consensus’ highlights another aspect of American hegemony,16 the relative impor-
tance of which is dependent on a wider geo-political context.
A second key dimension of American hegemony, then, is the way a particular set
of ideas or values were operationalised as part of the so-called Bretton Woods
institutions.17 Significantly, control of the international financial institutions (IFIs)

11
Kent E. Calder, ‘Securing security through prosperity: The San Francisco System in comparative
perspective’, Pacific Review, 17 (2004), pp. 135–57.
12
Mark Beeson, ‘Re-thinking regionalism: Europe and East Asia in comparative historical
perspective’, Journal of European Public Policy, 12:6 (2005), pp. 969–85.
13
Michael Schaller, Altered States: The United States and Japan Since the Occupation (New York:
Oxford University Press, 1997).
14
Richard Stubbs, Rethinking Asia’s Economic Miracle (Basingstoke: Palgrave, 2005).
15
Even Japan had what has been described as a ‘soft’ authoritarian government, a pattern that was
replicated even more forcefully in other parts of the region. See, Meredith Woo-Cumings (ed.), The
Developmental State (Ithaca, NY: Cornell University Press, 1999).
16
Mark Beeson and Iyanatul Islam, ‘Neoliberalism and East Asia: Resisting the Washington
Consensus’, Journal of Development Studies, 41:2 (2005), pp. 197–219.
17
Robert Latham, The Liberal Moment: Modernity, Security, and the Making of Postwar International
Order (New York: Columbia University Press, 1997).
 The dynamics of Chinese and American power 99

is one area in which there is increasing concern about the inequitable dominance
of the US in particular and the ‘Western’ nations more generally: East Asian
nations are strikingly under-represented in such bodies and a change in their status
will be a key manifestation of a changing international order if and when it
occurs.18 There is, however, another more informal, diffuse and intangible aspect
of American hegemony which is reflected in the institutionally embedded domi-
nance of a range of cultural and economic practices associated with the US,
leading some observers to claim that it is uniquely placed to benefit from the very
order it helped create.19
There is clearly something in this. After all, this is the way hegemony ought to
work – from whichever perspective one approaches American power. Neo-
Gramscian scholars have usefully drawn attention to the intersection of material
power and ideas, and their crystallisation in formal and informal institutions.20
Whether or not one sees this as a manifestation of a self-conscious class pursuing an
increasingly global set of interests,21 there is plainly a transnational dimension to
contemporary processes of governance that may favour some nationally-based elites
more than others, without necessarily being unambiguously under the direct control
of any of them.22 This is an especially challenging possibility for those state-centric
interpretations of hegemonic competition that consider it to be driven by nationally-
based, competing elites, intent on promoting ‘their’ national interests. While the
increased unilateralism and militarisation of American foreign policy serves as a
salutary reminder that – in the context of national security, at least – there are still
such parochial impulses,23 in other areas the very idea of a discrete national interest,
let alone a universally supported strategy for pursuing it, is an increasingly
problematic, socially-constructed artefact of cross-cutting political and economic
interests.24
Nevertheless, the possibility that some states are advantaged as a consequence of
their capacity to exercise a form of ‘structural’ power that flows from their position
in the international system is central to any consideration of why some countries are
more powerful than others.25 Barnett and Duvall distinguish structural power from
‘productive’ power, the latter referring to the ‘diffuse constitutive relations [that]

18
David P. Rapkin and Jonathan Strand, ‘Is East Asia under-represented in the International
Monetary Fund?’, International Relations of the Asia Pacific, 3 (2003), pp. 1–28.
19
G. John Ikenberry, ‘American power and the empire of capitalist democracy’, Review of
International Studies, 27 (2001), pp. 191–212.
20
Robert W. Cox, Production, Power, and World Order: Social Forces in the Making of History (New
York: Columbia University Press, 1987); Stephen Gill, ‘Globalisation, market civilisation, and
disciplinary neoliberalism’, Millennium, 24 (1995), pp. 399–423.
21
For one of the most sophisticated expositions of this possibility, see William I. Robinson, A Theory
of Global Capitalism: Production, Class, and State in a Transnational World (Baltimore, MD: John
Hopkins University Press, 2004).
22
Craig N. Murphy, ‘Global governance: Poorly done and poorly understood’, International Affairs,
76 (2000), pp. 789–803.
23
See respectively, Ivo H. Daadler and James M. Lindsay, America Unbound: The Bush Revolution in
Foreign Policy (Washington: Brookings Institution, 2003); Andrew J. Bacevich, The New American
Militarism: How Americans Are Seduced By War (Oxford: Oxford University Press, 2005).
24
J. G. Ruggie, ‘What makes the world hang together? Neo-utilitarianism and the social
constructivist challenge’, International Organization, 52 (1998), pp. 855–85; Philip G. Cerny,
‘Globalisation, governance, and complexity’, in A. Prakash and J. A. Hart (eds), Globalization and
Governance (London; Routledge, 1999), pp. 188–212.
25
Susan Strange, States and Markets (London: Pinter Publishers, 1994).
100 Mark Beeson

produce the situated subjectivities of actors’.26 This distinction is useful because it

highlights a hitherto important aspect of American power, but one which has been
steadily undermined of late as a consequence of its declining legitimacy.27 While the
ability of American foreign policy-makers to impose or institutionalise particular
economic and political practices has always been contested, the attractiveness of such
ideas has been eroded by a growing antipathy toward American foreign policy,28 and
by the emergence of competing ideas about the basis and conduct of international
relations. Although such processes are still in their infancy, China has begun to
enunciate an alternative vision of development and international order that may help
to consolidate its own position at the centre of an emergent regional system at the
expense of the US. At the very least, such developments raise important questions
about the nature of regional influence and highlight the limits of American primacy,
despite its overwhelming strategic dominance. To explain this apparent paradox, it is
useful to initially consider the nature of the US’s material strength, before consid-
ering the contradictory nature of its political and economic relations with China and
the region.

Security and geopolitics

For traditional, state-centric analyses of hegemonic power and transition, military

might is a pivotal measure of influence and determinant of dominance.29 In this
context, there should be no doubt about the US’s continuing primacy. Despite the
concerns expressed by many realist scholars about the rise of China and the supposed
likelihood, if not inevitability of conflict, American ascendancy seems assured. As has
frequently been pointed out, the US spends more on military hardware than the next
15–20 powers combined. Moreover, the US has an unrivalled ability to project
power, as well as a major and expanding lead in the technical sophistication of its
weapons systems – something many observers take to be an unambiguous and
enduring expression of America’s continuing dominance.30 And yet, it is not obvious
that this military strength is as decisive as it once was, or that the ability of other
countries like China to challenge American dominance should be judged exclusively
or even primarily by their ability to counter conventional military might. On the
contrary, it is possible that the nature of contemporary international relations, in
which the declining incidence and utility of traditional inter-state conflict is such a
noteworthy part,31 may be opening a political space within which to challenge
American primacy with comparative impunity – especially where this is reinforced
with other, increasingly relevant and utilisable forms of structural power.
26
Michael Barnett and Raymond Duvall (eds), Power in Global Governance (Cambridge: Cambridge
University Press, 2005), p. 12.
27
Robert W. Tucker and David C. Hendrickson, ‘The sources of American legitimacy’, Foreign
Affairs, 83 (2004), pp. 18–32.
28
See, America’s Image Slips, But Allies Share US Concerns Over Iran, Hamas (Washington: Pew
Research Center, 2006) Available at: 〈http://pewglobal.org/reports/display.php?ReportID=252〉.
29
Douglas Lemke, Regions of War and Peace (Cambridge: Cambridge University Press, 2002).
30
Stephen G. Brooks and William C. Wohlforth, ‘American primacy in perspective’, Foreign Affairs,
81 (2002), pp. 20–33.
31
John E. Mueller, Retreat From Doomsday: The Obsolescence of Major War (New York: Basic
Books, 1989); Raimo Vayrynen (ed.), The Waning of Major War (London: Routledge, 2006).
 The dynamics of Chinese and American power 101

When trying to assess how important military power is, much depends on the
specific historical context. Here the US’s record in East Asia is uneven and
contradictory. At one level, it is plain that, despite not being ‘of’ the region in the way
that China unambiguously is, the US exercised a decisive, continuing influence on the
development of East Asia for more than half a century. The construction of the
bilateral strategic relationships in East Asia noted earlier, was not only markedly
different from the its approach to Europe (where it encouraged a process of regional
integration), but the effective maintenance of an ‘uneasy stalemate’ in a divided East
Asia was a key part of its own hegemonic role.32 Consequently, while the Cold War
endured, there was simply no possibility that China could play a significant part in
regional relations, let alone seek to reinsert itself at the centre of an increasingly
integrated East Asia.
The cornerstone of American strategy in the region during this period was not
simply ‘containing’ China, but consolidating the position of Japan as an economic
and strategic bulwark against communist expansion.33 Two aspects of the relation-
ship between the US and Japan have long-term implications for both the US’s
relationship with China and our understanding of hegemony, and consequently merit
spelling out. First, Japan’s historically subordinate role to the US and its consequent
inability to play an independent, leadership role in East Asia, help to explain the
stunted nature of its own hegemonic ambitions and capacities throughout the
post-war period. Japan’s recent participation in American strategic initiatives like
the missile defence scheme and the recently announced defence treaty with America’s
other key regional ally Australia, not only limit Japan’s own policy autonomy, but
are plainly designed with China in mind.34 The second point to make, then, is
that – at the strategic level, at least – the US remains the lynchpin of an entrenched
pattern of security relations that notionally disadvantage and constrain China. And
yet, it is striking that, not only are the benefits of such ‘bandwagoning’ behaviour by
countries such as Japan and Australia increasingly unclear, especially as they limit the
possibility of developing a more independent relationship with the region, but
American strategy may also actually work to China’s advantage.35

The limits to military dominance

The possibility that inter-state warfare is not simply increasingly redundant but a
counter-productive contributor to hegemonic decline is confirmed by America’s own
experiences. Although most recent attention has focused on the ‘fiasco’ in Iraq,36 it

32
Michael Mastanduno, ‘Incomplete hegemony and security order in the Asia-Pacific’, in G. J.
Ikenberry (ed.), America Unrivalled: The Future of the Balance of Power (Ithaca, NY: Cornell
University Press, 2002), pp. 141–70.
33
Michael Schaller, Altered States: The United States and Japan Since the Occupation (New York:
Oxford University Press, 1997).
34
Richard Tanter, ‘The New American-led Security Architecture in the Asia Pacific: Binding Japan
and Australia, containing China’, Australian, 13 March 2007. Japan Focus, 17 March 2007.
35
Mark Beeson, ‘The declining theoretical and practical utility of ‘bandwagoning’: American
hegemony in the age of terror’, British Journal of Politics and International Relations, 9 (2007),
pp. 618–35.
36
Thomas Ricks, Fiasco: The American Military Adventure in Iraq (London: Allen Lane, 2006).
102 Mark Beeson

is worth remembering why so many make a comparison with America’s earlier

experience in Vietnam. Not only did Vietnam have a massive negative impact on the
US domestically, but it also inaugurated – for a generation, at least – a period of
diminished ambitions and a greater reluctance to intervene overseas generally and in
East Asia in particular. Equally importantly as far as the US’s overall hegemonic
position was concerned, Vietnam sapped America’s own economic strength, while
simultaneously allowing its competitors in Europe and Asia to catch up. Indeed, one
of the great ironies and contradictions of America’s preoccupation with grand
strategy was that it was instrumental in cultivating successful capitalist economies
like Japan, which would ultimately have an ambivalent impact on its own economic
position.37 History seems to be repeating itself. As Arrighi observes, ‘all the evidence
seems to point to China as the real winner of the War on Terrorism whether or
not the US eventually succeeds in breaking the back of al Qaeda and the Iraqi
insurgency’.38
Much has been written about the ill-judged intervention in Iraq and the sort of
American foreign policy that underpinned it.39 At first blush, such folly seems to
confirm Kolko’s observation that ‘thinking about war in official circles and among
those strategic analysts attached to them, not only in the United States but elsewhere,
has remained remarkably impervious to experience’.40 But such a blanket assertion
overlooks important differences in the way security is perceived and pursued,
differences that have been especially sharply drawn in East Asia. The widely noted
‘comprehensive’ nature of security in much of East Asia, which embraces economic
and diplomatic practices, and which has political survival and regime maintenance at
its core,41 was pioneered by Japan and has been embraced by China, too.42 For the
political leadership of the PRC, economic security is arguably at least as important
as conventional sovereignty: without continuing rapid development the legitimacy of
the extant regime will be increasingly called into question with potentially fatal
consequences.43 In such circumstances, we should not be surprised if China’s strategic
calculus looks rather different from the universalised expectations that inform much
strategic thinking in North America.
What is surprising, perhaps, is how much Chinese strategic thinking seems to
have in common with the US, despite their very different circumstances. Johnston
has detailed the continuity of realist thinking in Chinese military strategy,44 and
it is plainly the expectations about state behavior that flow from such zero-sum

37
Stubbs, Rethinking.
38
Giovanni Arrighi,, ‘Hegemony unravelling-2’, New Left Review, 33 (2005), p. 115.
39
On Iraq, see George Packer, The Assassin’s Gate: America in Iraq (New York: Farrar, Strauss and
Giroux, 2005). On the recent ‘revolution’ in US foreign policy, see Daadler and Lindsay, America
Unbound.
40
Gabriel Kolko, Century of War (New York: New Press, 1994), p. 464.
41
Muthiah Alagappa, ‘Asian practice of security: Key features and explanations’, in Muthiah
Alagappa (ed.), Asian Security Practice: Material and Ideational Influences (Stanford, CA: Stanford
University Press, 1998), p. 625.
42
Richard W. Hu, ‘China in search of comprehensive security’, in J. C. Hsiung (ed.), Twenty-First
Century World Order and the Asia Pacific (New York: Palgrave, 2001), pp. 309–25.
43
Yongnian Zheng and Liang Fook Lye, ‘Political legitimacy and reform in China: Between
economic performance and democratization’, in Lynn White (ed.), Legitimacy: Ambiguities of
Political Success or Failure in East and Southeast Asia (New Jersey: World Scientific, 2005),
pp. 183–214.
44
Alastair I. Johnston, Cultural Realism: Strategic Culture and Grand Strategy in Chinese History
(Princeton, NJ: Princeton University Press, 1995).
 The dynamics of Chinese and American power 103

perspectives that inform much thinking about China in the US.45 What is equally
striking, however, is that despite high profile criticisms of Chinese defence spending,
it remains relatively modest, and is likely to remain a fraction of America’s despite
the growth of the Chinese economy.46 True, China’s defence spending has grown as
its economy expands, but what is more important is the quality of its military, which
remains no match for the US. As David Shambaugh has pointed out, China is twenty
years behind the US in terms of technological sophistication and the gap is growing,
causing China’s strategists to develop a ‘new security concept’ that privileges ‘soft’
over ‘hard’ power, and which is aimed squarely at China’s regional neighbours.47
Despite the attention that Taiwan continues to receive as a supposed regional
‘flashpoint’, it is evident that its military leaders recognise that China would face
certain defeat.48 It is, of course, always possible that miscalculation, accident
or – most plausibly, perhaps – the sort of nationalist sentiment that is already
proving a headache for China’s leaders,49 could trigger a conflict between the US and
China, but it seems more likely that the longer conflict is deferred, the less likely it will
become.50 On the one hand, this is a product of China’s own grand strategy which
‘aims to avoid the provocative consequences of the more straightforward hegemonic
and balancing strategies’.51 On the other, it is a function of the sort logic of economic
interdependence that liberals would expect to see, a possibility that is taken up in
more detail below. What is worth briefly noting at this stage are the sorts of initiatives
that China has undertaken in the region as a result of this recognition of its own
strategic limitations.

‘Soft balancing’ Chinese style?

Over the last few decades there has been a steady, but remarkable change in China’s
foreign and security policies. China’s elite foreign policymakers have become more
numerous, knowledgeable, and professional. Despite the fact that they are still
dedicated to pursuing the PRC’s ‘national interest’, the way such interests are
discursively constructed has affected overall policy. As David Lampton points out, in
such circumstances, ‘even narrow calculations of national interest may produce

45
See, for example, Department of Defense, Annual Report to Congress: Military Power of the
People’s Republic of China (Washington, DC: Department of Defense, 2006).
46
An authoritative report by the Rand Corporation projected that China’s defence spending would
remain less half that of the US, even if its leaders made it a major priority, something they
considered unlikely given the need to continue pushing economic development and managing
demographic and social change. See, Keith Crane et al., Modernizing China’s Military:
Opportunities and Constraints (Santa Monica, CA: Rand Corporation, 2005).
47
David Shambaugh, Modernizing China’s Military: Progress, Problems, and Prospects (Berkeley, CA:
University of California Press, 2002).
48
Robert S. Ross, ‘Assessing the China threat’, The National Interest (Fall 2005), pp. 81–7.
49
See, Peter H. Gries, China’s New Nationalism: Pride, Politics, and Diplomacy (Berkeley, CA:
University of California Press, 2004).
50
Robert Ross makes the important point that, not only have Taiwan’s leaders actually become more
reluctant to acquire new weapons systems from the US with which to defend themselves against
China, but Taiwanese business leaders and investors are effectively acting as a ‘fifth column’ as the
mainland assumes an ever greater economic importance to Taiwan. See Robert S. Ross, ‘Balance of
power politics and the rise of China: Accommodation and balancing in East Asia’, Security Studies,
15 (2006), pp. 355–95.
51
Avery Goldstein, Rising to the Challenge: China’s Grand Strategy and International Security
(Stanford: Stanford University Press, 2005), p. 39.
104 Mark Beeson

progressively more cooperative behavior’.52 Of course, such shifts in policy-making

style and content might be read as ‘structurally-induced’, and a consequence of an
essentially realist-inspired recognition of China’s still limited international influence
in the face of continuing American dominance.53 Such a possibility has been central
to the notion of ‘soft balancing’, which seeks to explain the conspicuous failure of
states to try and off-set American strategic pre-eminence in the way that realist
thinking suggests they ought.54 While there is something in this, it is also clear
that China’s evolving foreign policies reflect the cumulative influence of greater
engagement with international institutions. Put differently, China’s elites have been
‘socialized’ into a new, externally-derived normative order in ways that have affected
the PRC’s longer-term international behaviour.55 The consequences of this transfor-
mation have been manifest in the increasingly sophisticated use of such institutions
and a regional ‘charm offensive’ that is designed to reduce nervousness about its rise
and undermine the dominance of the US.56
A number of aspects of China’s recent engagement with the East Asian region are
worth highlighting. First, and most paradoxically, perhaps, China has of late
demonstrated a greater enthusiasm for multilateral engagement than has the US,
which was the architect of the very system in which China has become an increasingly
effective part.57 The increasing preference for unilateralism on the part of the US
has been widely noted, as has its impact on the moral authority and legitimacy
of American foreign policy as a consequence.58 What is equally striking, is the
increasingly skilful way China has engaged with international institutions to burnish
its own credentials as a ‘responsible’ international actor, a tactic that not only
highlights possible American failings by contrast, but which makes it more difficult
for the US to ‘contain’ China as a result.59 Nowhere has the juxtaposition been more
stark than in China’s ever closer relations with the Association of Southeast Asian
Nations (ASEAN).60 Whereas the US has frequently snubbed ASEAN,61 China has
established a Free Trade Agreement, signed ASEAN’s Treaty of Amity and
Cooperation, and taken a much softer line on contentious issues like the potentially
resource-rich Spratly Islands, over which China and a number of Southeast Asian
states have potentially competing claims.62

52
David M. Lampton, ‘China’s foreign and national security policy-making process: Is it changing,
and does it matter?’, in David M. Lampton (ed.), The Making of Chinese Foreign and Security
Policy in the Era of Reform (Stanford: Stanford University Press, 2001), p. 36.
53
Michael D. Swaine and Ashley J. Tellis, Interpreting China’s Grand Strategy: Past, Present, and
Future (Santa Monica, CA: RAND, 2000).
54
T. V. Paul, ‘Soft balancing in the age of US primacy’, International Security, 30 (2005), pp. 46–71.
55
Alastair I. Johnston, ‘Socialization in international institutions: The ASEAN way and international
relations theory’, in G. J. Ikenberry and M. Mastanduno (eds), International Relations and the
Asia-Pacific (New York: Columbia University Press, 2003), pp. 107–62.
56
Joshua Kurlantzick, Charm Offensive: How China’s Soft Power Is Transforming the World (New
Haven, CT: Yale University Press, 2007).
57
Christopher R. Hughes, ‘Nationalism and multilateralism in Chinese foreign policy: Implications
for Southeast Asia’, Pacific Review, 18 (2005), pp. 119–35.
58
Mark Beeson and Richard Higgott, ‘Hegemony, institutionalism and US foreign policy: Theory
and practice in comparative historical perspective’, Third World Quarterly, 26:7 (2005), pp. 1173–88.
59
Rosemary Foot, ‘Chinese strategies in a US-hegemonic global order: Accommodating and hedging’,
International Affairs, 82 (2006), pp. 77–94.
60
Alice D. Ba, ‘China and Asean: Renavigating relations for a 21st-century Asia’, Asian Survey, 43
(2003), pp. 622–47.
61
Sydney Morning Herald, 19 August 2005.
62
AsiaTimes, 21 February 2007.
 The dynamics of Chinese and American power 105

China’s activist diplomacy is, therefore, surprising, successful, and at odds with
what we might expect: not only is it remarkable that the formerly prickly People’s
Republic has become an effective mainstay of East Asia’s burgeoning regional
institutional forums and diplomatic architecture,63 but it has done so – at least
partly – at the expense of the US, which ought to have been better placed to benefit
from the prevailing international order. It is significant, for example, that what may
prove to be the most important attempt to create an indigenous institutional forum
with which to manage intra-regional relations – ASEAN+364 – explicitly excludes
the US and reflects a much more narrowly defined conception of ‘East Asia’, rather
than the all encompassing notion of an ‘Asia-Pacific’ region that has been champi-
oned by the US and key allies like Australia.65 Equally importantly – and even more
surprisingly – China is beginning to exert the sort of ideological influence that was
once thought to be the exclusive preserve of the US, and what was taken to be the
inherent attractiveness, if not superiority of its political system, economic structures
and even ‘lifestyles’.66
But claims about the supposedly irresistible influence of the Anglo-American
model of capitalism and the concomitant rapidity of ‘convergence’ on a neoliberal
template were always somewhat overstated.67 In much of East Asia, the economic
and political reforms associated with the ‘Washington consensus’ have often been
regarded with ambivalence and actively resisted.68 Indeed, China’s own developmen-
tal experiences are much closer to those of the ideal-typical, East Asian developmen-
tal state.69 I consider some of the impacts of China’s economic transformation below,
but the point to emphasise at this stage is that China is actively promoting an
alternative ‘Beijing consensus’, one ‘defined by a ruthless willingness to innovate and
experiment, by a lively defence of national borders and interests, and by the
increasingly thoughtful accumulation of tools of asymmetric power projection’.70
This preoccupation with pragmatism and the preservation of the state has an appeal
not just in an East Asian region that has been historically concerned with protecting
sovereignty, but also across other parts of the non-Western, ‘developing world’,
where China is playing an increasing prominent role.71
The rather surprising success of Chinese diplomacy might seem a confirmation of
hegemonic transition, especially when combined with evidence of the apparently
unstoppable rise of the Chinese economy. Things are more complex than they seem,

63
David Shambaugh, ‘China engages Asia’, International Security, 29 (2004/05), pp. 64–99.
64
ASEAN+3 includes the Southeast Asian nations of ASEAN, plus China, Japan and South Korea.
See, Richard Stubbs, ‘ASEAN Plus Three: Emerging East Asian Regionalism?’, Asian Survey, 42
(2002), pp. 440–55. Other initiatives, like the East Asian Summit, have been down-played by the
ASEAN+3 grouping and suffer from the same sort of potential incoherence that has plagued
APEC.
65
Mark Beeson, ‘American hegemony and regionalism: The rise of East Asia and the end of the
Asia-Pacific’, Geopolitics, 11:4 (2006), pp. 541–60.
66
Joseph S. Nye, The Paradox of American Power (Oxford: Oxford University Press, 2002);
Ikenberry, ‘American power’.
67
Michael Mastanduno, ‘Models, markets, and power: Political economy and the Asia-Pacific,
1989–1999’, Review of International Studies, 26 (2000), pp. 493–507.
68
Beeson and Islam, Resisting.
69
For a more detailed discussion of this claim and of the developmental state more generally, see
Mark Beeson, Regionalism, Globalization and East Asia: Politics, Security and Economic
Development (Basingstoke: Palgrave, 2007).
70
Joshua C. Ramo, The Beijing Consensus (London: The Foreign Policy Centre, 2004), p. 4.
71
See Ian Taylor, ‘China’s oil diplomacy in Africa’, International Affairs, 82 (2006), pp. 937–59.
106 Mark Beeson

however. When we consider the basis of China’s recent ascent – its remarkable
economic expansion – it is not obvious whether the US or China is in the ascendant,
or even whether a national, state-centric focus is the most appropriate way of
measuring their respective standing.

The political-economy of hegemonic transition?

Given the attention that has been paid to China’s remarkable, historically unprec-
edented growth, it might be supposed that evidence of its ascension and the extent of
the potential challenge it poses for the US might be unambiguous. In some ways, it
is. Double digit average growth rates for more than two decades have transformed
China and triggered a dramatic rise in living standards, especially along its eastern
seaboard. But the impact of this highly uneven transformation and the spatially-
realised economic and social disparities it has created, is fuelling massive internal
migration, and generating domestic instability as a result.72 The contradictory impact
of wrenching economic change is one reason that assessing the significance of China’s
economic development is problematic. Another is the quality and nature of the
economic changes themselves.
Despite the hyperbole that characterises some accounts of China’s development,
there are significant grounds for caution. As Shaun Breslin points out, China’s recent
economic development started from a very low base, and despite extraordinary,
sustained growth rates, average per capita incomes still remain well below those of
Russia.73 Equally importantly, there are doubts about the long-term impact of
China’s place in the international division of labour. The massive foreign investment
that has been such a distinctive, important and enduring part of China’s economic
development may have underpinned the scale of the transformation underway there,
but it also helps to explain the often subordinate nature of China’s integration into
global and regional production networks.74 The rapid growth of China’s manufac-
turing sector has been dominated by foreign affiliates, which account for more than
half of China’s overall foreign trade, of which a further half is the simple assembly
and processing of imported inputs for finished goods that will eventually exported.75
In some ways China echoes the concerns that were expressed about ‘ersatz capitalism’
in Southeast Asia in earlier decades,76 although there are already signs of China
making the transition to more sophisticated forms of manufacturing.77 In any case,
China’s sheer size means that even a role as predominantly an export platform is
causing major economic restructuring across the entire East Asian region.

72
International Herald Tribune, 29 July 2007.
73
Shaun Breslin, ‘Power and production: Rethinking China’s global economic role’, Review of
International Studies, 31 (2005), p. 736.
74
The Economist, 11 January 2007.
75
Guillaume Gaulier, Francoise Lemoine and Deniz Unal-Kesenci, China’s Emergence and the
Reorganisation of Trade Flows in Asia (Paris: CEPPI, 2006).
76
It was thought that Southeast Asia’s role as a source of low-skill, cheap labour for foreign
multinationals would inhibit indigenous capitalist development – an idea that still has some
resonance. See, Kunio Yoshihara, The Rise of Ersatz Capitalism in Southeast Asia (Quezon City:
Manila University Press, 1988).
77
Financial Times, 28 August 2007.
 The dynamics of Chinese and American power 107

A number of points are worth emphasising about China’s place in regional and
global production networks. First – and most importantly as far as claims about
possible Chinese hegemony are concerned – China’s economic expansion is not
coming at the expense of its neighbours.78 On the contrary, one of the reasons that
the region has bounced back so well from the economic crisis of the late 1990s is
because the region – including Japan79 – has generally benefited from rapidly expand-
ing trade surpluses with China. However, unlike Japan, which conspicuously failed to
play a political or economic leadership role in the region, China has been open to
foreign investment.80 Recently, it has also begun to play the role of a regional growth
engine, sucking in imports, establishing itself at the centre of increasingly integrated,
regional production networks, and generally making the region less reliant on the
US.81
Second, despite the concern regularly expressed in the US about its expanding
trade deficit with China, it is actually American firms that are largely responsible for
the dramatic growth of ‘Chinese’ exports to the US. As Hughes points out,
‘Wal-Mart alone purchased $18 billion worth of Chinese goods in 2004, making it
China’s eighth-largest trading partner – ahead of Australia, Canada and Russia’.82
Put differently, powerful economic and political actors in the US have a vested
interest in maintaining cordial relations with an open, outward-looking China, and
making simple calculations or depictions of ‘the national interest’ problematic as a
consequence.
Paradoxically enough, therefore, despite some doubts about the depth of China’s
development process, its sheer scale is ensuring that even Japan and the US are
increasingly reliant on the Chinese economy for their own development and stability.
In America’s case, this odd symbiosis has reached unexpected and potentially
dangerous proportions. While the highly visible nature of the trade relationship
generally captures the headlines, a growing financial interdependence is also under-
mining American strength and constraining its own policy autonomy. One of the
most striking and potentially unsustainable features of the contemporary inter-
national economic system is the US’s massive trade deficit with China on the one
hand, and China’s concomitant accumulation of the world’s largest foreign currency
reserves, on the other. China currently invests much of this very conservatively in
American Treasury Bills, allowing US interest rates to remain lower than they would
be otherwise, and consumption (of Chinese exports) to continue unabated.83 While
this relationship may benefit both parties in the short-term, Arrighi argues that
‘adjustment will inevitably result in a further decrease of US command over world
economic resources, a reduction of the weight and centrality of the US market in the
global economy, and a diminished role for the dollar as international means of

78
Despite widespread fears about the impact of China’s rise on Southeast Asia in particular,
ASEAN’s exports to China continue to grow. Dominic Ziegler’, Reaching for a renaissance: A
special report on China and its region’, The Economist, 31 March 2007.
79
Financial Times, 5 April 2007.
80
By contrast, Japan has been reluctant to open up its domestic market, something that has
undermined its regional leadership ambitions and heightened concerns about the impact of its
neo-mercantilist policies. See, Walter Hatch, and Kozo Yamamura Asia in Japan’s Embrace:
Building a Regional Production Alliance (Cambridge: Cambridge University Press, 1996).
81
The Economist, 14 April 2007, p. 87.
82
Neil C. Hughes, ‘A trade war with China?’ Foreign Affairs, 84 (2005), p. 94.
83
International Herald Tribunal, 9 March 2007.
108 Mark Beeson

payment and reserve currency’.84 China’s growing immunity to American economic

leverage has been clearly revealed by the latter’s failure to engineer a devaluation in
the yuan.85 The concern expressed by policymakers in the US about the investment
strategies of China’s rapidly expanding sovereign wealth funds and their desire to
invest in ‘American’ financial assets is also indicative of China’s growing economic
influence.86

The limits to Chinese power

But while China’s power is growing, it should not blind us to clear short- and
long-term constraints on its position. On the one hand, China cannot risk exploiting
the potential structural leverage that its massive dollar holdings appears to confer,
lest it trigger a crisis in which it would be a major victim.87 This possibility has
become especially relevant following recent turmoil in global financial markets, to
which China was exposed, but which had their origins in the US – something that
may further erode the long-term position of the American economy.88 On the other
hand, however, it is important to remember that the very fact that China has become
such a key player in global trade networks and financial markets is testimony to two
enduring, under-appreciated, structural and institutionalised aspects of American
hegemony. First, the continuing size of the American economy, the importance of its
domestic market, and (thus far, at least) the centrality of its financial institutions,
mean that the US continues to benefit from its entrenched position and dominance.
According to some observers, ‘financial markets have played a directly imperial role
[making] it possible for the American economy to attract global savings that would
otherwise not be available to it’.89 While there is evidence that even here American
dominance may be threatened,90 it remains a formidable force in which even
profligacy and indebtedness may paradoxically be sources of strength.91
The second aspect of American power that has been decisive as far as US-China
relations are concerned is institutional and reflects its continuing influence over the
IFIs.92 The fact that China has effectively abandoned socialism in all but name, and
sought to join a capitalist economy dominated by the US is a ‘victory’ of long-term
84
Arrighi, ‘Hegemony’, p. 70.
85
International Herald Tribunal, 4 April 2007.
86
The establishment of the China Investment Corporation with $200bn to invest is indicative of this
potential, as was China’s $3bn investment in the initial public offering of Blackstone, a US private
equity group. See Financial Times, 29 July 2007.
87
This is clearly something the Chinese authorities are aware of themselves. See, Financial Times,
16 March. It is also precisely the same situation Japanese policymakers confronted in the 1980s and
’90s, but which they conspicuously failed to act upon. See R. T. Murphy, ‘East Asia’s dollars’, New
Left Review, 40 (2006), pp. 39–64.
88
International Herald Tribune, 24 August 2007.
89
Leo Panitch and Sam Gindin, ‘Finance and American empire’, in Leo Panitch and Colin Leys
(eds), The Socialist Register: The Empire Reloaded (London: Merlin Press, 2004), p. 69.
90
There is now a very real prospect that New York’s position as the centre of global finance will be
overtaken by London, something that could further erode both the influence of Wall Street and the
importance of the US dollar. See, Merril Stevenson, ‘Britannia redux: A survey of Britain, The
Economist, 1 February 2007.
91
Leonard Seabrooke, US Power in International Finance (Basingstoke: Palgrave, 2001).
92
Robert H. Wade, ‘The invisible hand of the American empire’, Ethics & International Affairs, 17
(2003), pp. 77–88.
 The dynamics of Chinese and American power 109

historic significance as far as the US is concerned, albeit one that seems strangely
unrecognised in the debates about the ‘China threat’.93 The symbolic and practical
culmination of this process was China’s accession to the WTO, which involved
agreeing to protocols and provisions which ‘far surpass those made by the founding
members’.94 At one level, then, there is a seemingly unambiguous confirmation of
continuing American hegemony and its long-term ability to shape the international
system according to its preferences that compels rivals to comply. And yet, the
alacrity with which China has adapted to the new order, its ability to ‘work the
system’, especially when combined with America’s recent unilateralism and loss of
legitimacy, all suggest that such ascendancy is not inevitable or immune from
challenge.
Having apparently vanquished socialism, American policymakers find themselves
embroiled in a competition to define the nature and governance of capitalism itself.
China’s less doctrinaire approach to development, to say nothing of the US’s own
incipient mercantilism,95 both mean that the ascendancy of neoliberalism is far from
assured: the emerging, intensified resource competition between the US and
China96 – now established as the first and second greatest consumers of oil and
energy respectively – has exposed the limits of American’s commitment to market
forces, and reinforced China’s determination to shore up its own position through
activist diplomacy and long-term economic links.97
To some extent the US has been here before: for much of the 1980s and even into
the 1990s, Japan looked set to eclipse the US economically. Ironically, Japan was also
able to benefit from the overarching geopolitical and institutional order the
Americans played such a large part in creating. In Japan’s case the challenge
ultimately fizzled out, largely as a consequence of its own political and economic
failings.98 But this time the challenge looks more formidable. All things being equal,
China looks set to overtake the US in the next decade or two as the world’s largest
economy and reinforce its growing economic and political importance to the region,
to say nothing of the rest of the world. In China’s case, though, its ascendancy is not
likely to be halted by its own faltering ambitions or inept diplomacy, but by political
crisis and the simple carrying capacity of the planet.
The legitimacy of China’s political leadership is increasingly dependent on
economic development, which while it has been spectacular, remains surprisingly
brittle. In addition to the social impacts noted above, concerns have been expressed
about the stability of the banking sector, particularly given its role as a source of
continuing credit for under-performing state-owned enterprises.99 The ability of the

93
Robert G. Sutter, China’s Rise: Implications for US Leadership in Asia. Policy Studies 21
(Washington, DC: East–West Center, 2006).
94
Nicholas R. Lardy, Integrating China into the Global Economy (Washington, DC: Brookings
Institute, 2002), p. 104.
95
In a revealing example of American attitudes, the US government refused to allow the take-over
over Unocal, by China’s state-owned oil company CNOOC on national security grounds. See,
Francis Schortegen, ‘Protectionist capitalists vs capitalist communists: CNOOC’s failed Unocal bid
in perspective’, Asia Pacific: Perspectives, 6 (2006), pp. 2–10.
96
Brent Boekestein and Jeffrey Henderson, ‘Thirsty Dragon, Hungry Eagle: Oil Security in Sino-US
Relations’, IPEG Papers in Global Political Economy, 21 (November 2005).
97
Subodh Atal, ‘The new great game’, The National Interest, 81 (2005), pp. 101–5.
98
Richard Katz, Japan: The System That Soured (Armonk, NY: M. E. Sharpe, 1998).
99
Barry Naughton, The Chinese Economy: Transitions and Growth (Cambridge, MA: MIT Press,
2007).
110 Mark Beeson

Chinese economy to generate sufficient jobs for its still growing population remains
a central concern of a government that has a greater notional commitment to the
welfare of the proletariat than its American counterpart does.100 More fundamen-
tally, perhaps, China’s transition from socialism to capitalism has been complicated
and compromised by an absence of the sort of state capacity that made Japan’s
earlier development so successful and sustained,101 and by an even greater reliance
on patronage, corruption and the maintenance of ‘circles of compensation’ as a
consequence.102 Indeed, Minxin Pei’s gloomy, but well-grounded conclusion is that
political transition will be difficult if not impossible in China, as ‘rapid short-term
economic growth may have a perversely negative impact on democratisation because
it provides all the incentives for the ruling elites not to seek political liberalization’.103
The final reason for questioning China’s ability to continue on its current
trajectory and establish itself at the centre of East Asian affairs is the most
fundamental and potentially the least remediable. China’s seemingly insatiable
appetite for resources, and energy,104 which has been such a key part of its
developmental project, may prove increasingly difficult to satisfy – its pro-active
diplomatic efforts to secure future supplies notwithstanding. Even more importantly,
the attitude of generations of political elites who have seen the natural environment
as something to be systemically exploited, has meant that its own environment has
been devastated, to a point where ‘China’s environmental problems now have the
potential to bring the country to its knees economically’.105 The environment is
already so degraded that it has generated social disturbances among a population
whose lives are being cut short, and whose access to basic amenities like safe drinking
water is increasingly insecure.106 Even for those countries where the legitimacy of
political elites is less dependent on economic development, and which have a greater
capacity to respond to environmental change, the challenge of environmental
adjustment is immense. In China’s case, it may prove fatal for the current incumbents
and threaten the longer-term position and integrity of the country as a whole.

Concluding remarks

The idea that a form of hegemonic transition might occur in East Asia is unlikely for
a number of reasons. First, it is clear that China is not yet – and possibly may never

100
Murray S. Tanner, ‘China rethinks unrest’, Washington Quarterly, 27 (2004), pp. 137–56.
101
For an insightful discussion of China’s modest state capacity in comparison with other pasts of
East Asia, see Thomas G Moore, China in the World Market: Chinese Industry and International
Sources of Reform in the Post-Mao Era (Cambridge: Cambridge University Press, 2002).
102
This was how similar patterns of inter-locking, mutually-satisfying political, bureaucratic and
business elites were described in Japan, a country that highlights all that can go right and wrong
with the developmental process. See, Kent E. Calder, Crisis and Compensation: Public Policy and
Public Stability in Japan (Princeton, NJ: Princeton University Press, 1988).
103
Minxin Pei, China’s Trapped Transition: The Limits of Developmental Autocracy (Cambridge, MA:
Harvard University Press, 2006), p. 207.
104
David Hale, ‘China’s Growing Appetites’, The National Interest, 76 (2004), pp. 137–47. But some
observers remain broadly optimistic that China can manage its energy dependence if it can achieve
effective reform and international integration. See, Tatsu Kambara and Christopher Howe, China
and the Global Energy Crisis: Development Prospects for China’s Oil and Gas (Edward Elgar, 2007).
105
Elizabeth C. Economy, The River Runs Black: The Environmental Challenge to China’s Future
(Ithaca, NY: Cornell University Press, 2004), p. 25.
106
The Guardian, 17 August 2006.
 The dynamics of Chinese and American power 111

be – in a position to replace the US as the dominant power in the region. Not only
does China still lack some of the requisite material strengths of the US, but – the
‘Beijing consensus’ notwithstanding – its lacks a distinctive vision or ideology around
which supportive states might coalesce. Indeed, other than break-neck industrialis-
ation and development, China’s ruling elite lacks a legitimating discourse with which
to win the support of its own people, something that leaves the current regime highly
vulnerable to economic downturn. And yet it is also clear that China has rapidly
reasserted itself at the centre of a more coherent and integrated East Asian regional
order, and that its neighbours, whether they like it or not, are increasingly dependent
on China for their own well-being and development. In such circumstances, China is
beginning to enjoy a degree of ‘structural’ power of a sort that has until recently been
predominantly associated with the US. At one level, then, ‘hegemony’ is an enduring
function of material power and economic strength, and not necessarily reliant on the
active ‘leadership’ of the dominant power. In reality, it may be an attribute attached
to more than one power and persist despite, rather than because of specific foreign
policy initiatives. Indeed, as John Agnew argues, as far as the international political
economy is concerned ‘empire American-style may be largely irrelevant to the
world-in-the-making of hegemony without a hegemon’.107
The United States’ relationship with East Asia illustrates this second possibility.
The US continues to benefit from the complex array of IFIs and security relations
it helped establish in the aftermath of the Second World War, despite the fact that its
recent foreign policy has undermined the efficacy of some of these selfsame
institutions, and undermined support for, and the legitimacy of, many of its own
foreign policies as a consequence. And yet, despite the apparent durability of
American leadership, its relationship with East Asia generally and China in
particular, suggest that this dominance is declining and may be less substantial than
it appears. America’s frequently noted ‘unipolar’ position and the strategic primacy
that underpins it,108 is highly dependent on East Asian capital for its continuation.
Simply put, the American economy could not operate in the way it does, nor could
the US pursue the sorts of foreign policies it would like, without massive inflows of
capital from East Asia. It is possible, of course, that a new administration will
overhaul America’s financial position as the Clinton administration did, and make
the US less dependent on foreign lenders. But the fact remains that its long-term
position vis-à-vis East Asia is declining, while China’s steadily improves.
Such a conclusion may be uncontroversial, but it is not entirely satisfying. The
complexity of the interaction between the ‘American’ and ‘Chinese’ economies also
serves as a powerful reminder that, in the absence of outright military conflict, these
sorts of nationally-focused analyses fail to capture the increasingly integrated,
interdependent nature of the economic relationship. Not only does the nature of
contemporary trade and investment relations make them resistant to easy manage-
ment in the national interest,109 but the very nature of the ‘national interest’ itself is
increasingly contested and recognised to be a socially-constructed artifact at the

107
John Agnew, Hegemony: The New Shape of Global Power (Philadelphia, PA: Temple University
Press, 2005), p. 35.
108
William C. Wohlforth, ‘The stability of a unipolar world’, International Security, 24 (1999),
pp. 5–41.
109
Joseph Quinlan and Marc Chandler, ‘The US trade deficit: A dangerous obsession’, Foreign Affairs,
80 (2001), pp. 87–97.
112 Mark Beeson

boundary of domestic-international relations.110 But thus far, at least, there is little

evidence to support the idea of a transnational class pursuing a putative common
interest as a consequence of such interactions. Despite China’s growing participation
in some of the most important international institutions of capitalist governance, the
underlying reality for China, as it is for the US, is that such agencies are used
instrumentally and in pursuit of predominantly nationally-inspired agendas – no
matter how unrealisable or inappropriate such agendas may be at times.
Such theoretical niceties are hardly likely to interest or inhibit policymakers, of
course. But it is not simply the complex nature of the global economy that is likely
to render older ideas of national dominance, if not hegemony, redundant. It has
rapidly become apparent that the natural environment is a ‘security’ issue of the first
order,111 one that threatens to derail China’s continuing development, and one that
is necessarily resistant to exclusively nationally-based solutions. Unfortunately, there
are signs that China is trying to follow the Japanese model,112 exploiting the regional
environment as a way of sparing its own.113 Such policies are not likely to be either
environmentally or politically sustainable in the long-term. Bleak as the prospects for
environmental sustainability in either China or East Asia currently are,114 they
highlight the limits of realist analysis: a zero sum scramble for rapidly diminishing
resources will only favour the strong for slightly longer than the weak. The only
‘realistic’ response to looming environmental crisis is one that involves admittedly
unlikely forms of cooperation in a region that is synonymous with fiercely protected
sovereignty. The ability of China’s leaders to transcend national imperatives and
provide regional leadership on this issue will truly be a test of their hegemonic
aspirations.

110
James N. Rosenau, Along the Domestic-Foreign Frontier: Exploring Governance in an Turbulent
World (Cambridge: Cambridge University Press, 1997).
111
The Guardian, 18 April 2007.
112
See, Peter Dauvergne, Shadows in the Forest: Japan and the Politics of Timber in Southeast Asia
(Cambridge, MA: MIT Press, 1997).
113
The Independent, 19 October 2005.
114
Paul Harris, Confronting Environmental Change in East and Southeast Asia: Eco-politics, Foreign
Policy, and Sustainable Development (UN University Press, 2005).