US Global Hegemony and the rise of China: How America will avoid Chinese dominance

The contemporary period appears to be characterised by transition. While all generations in the modern age may feel they stand on the cusp of radical social change – and to some extent these intuitions may be justified – the extraordinary social and economic transformations taking place today are suggested to be of epoch-defining magnitude. The acceptance of a shift of power from West to East has been prominent in scholarly debate for a decade or so, the rise of China is the unstoppable process which will ultimately declare this new age. China’s ascent has been accepted by theorists from both left and right of the spectrum, with the implications for democracy, human rights and economic management in a new Pax-Sinica given prominence amongst many analyses. For some, the decline of United States hegemony and the economic growth of the People’s Republic have been set on a teleological path since the US invasion of Iraq.

I hope to show that whilst the issue of fluctuating global relations is clearly complex, the arguments supporting both the future decline of United States and the growth of China are contingent on many factors. Whilst it can be accepted that China’s economic power is already evident, there still remains difficulties in transforming thateconomic power into global dominance. All this speculation over the future is, of course, conjecture, and my thoughts on the matter must necessarily conform to that category. We are unable be certain of changes that are taking place today in order to map out any future global trajectory. But we can make assumptions based on historically contingent events. It can be argued that the decline of US hegemony is not absolute. There are contained within Chinese policy many contradictions to suggest that such a transformation of global power from West to East is not inevitable. I hope to show that despite China’s success in promoting sustained economic growth, the end of US global dominance is far from assured. The power held by US financial capital under the current financial system is accrued in such a way that it seems unlikely to change, and the difficulties faced by China in altering this arrangement mean that the current relations of power are likely to remain for at least a while longer.

I – US post-war hegemony

For any discussion on the longevity of US dominance, we must first explicate the basis of any claim which states that the US actually exhibits any global dominance. For Mann, the utility of general power is reliant on four constituent powers, those of “ideological, economic, military and political,” power. It is through the use of these powers that the US was able to obtain dominance in global relations within the post-war period. There is a complex interweaving between these powers in which no single power is entirely dominant; military power relies on the economic, political on the ideological, and so on. Yet under the primacy of the capitalist modes of accumulation which have characterised modernity, the provision of economic power can be said to ensure access to other powers is less arduous than it would be in the absence of such economic power. I suggest this be treated as a truism within a capitalist system.

This idea of the post-war dominance of the international capitalist system by the United States is crucial. Capitalism has created an abstract economic order which relies on certain universals for its operation- property rights, legal systems, arbitration and most importantly, the ability to extract value from subordinate labour. Competition remains at the heart of the system, at a domestic level, but also internationally. As Kautsky noted in the wake of the Great ‘imperial’ War, the future stability of the capitalist order had to lie within some mechanism of enforced coordination within the capitalist order. This was Kautsky’s ‘Ultra-Imperialism.’ The required coordination duly arrived with the post-war emergence of US economic dominance. With all other powers virtually bankrupt – note the Soviet Union was receiving Lend Lease during WWII – the financial power of the US in the post-war environment was unparalleled. As Gramsci understood, this enforced coordination could not take place through overt coercion, but through some form of ‘persuasion,’and in the case of post-war environment, this ‘persuasion’ was the promise of a fast-track to modernity through the acceptance of the peculiar American modes of production and culture existent within its form of capitalist accumulation. This ‘persuasion’ for Gramsci is hegemony; it is the extra power accrued by a dominant group thanks to its ability to lead another group, in a way that not only serves the dominant groups interests but is also is perceived by the subordinate group to also benefit their interests. In this way, the US has utilised its economic and military power combined with the ideology of capitalist accumulation itself, and the political power of global institutions, such as the IMF, to transform its former enemies in Germany and Japan into virtual client states, and doing so in a way which is legitimised by being ‘in the best interests’ of those particular countries. This may be a rather reductionist way of viewing the complex relationships between the United States and even its closest allies since 1945, but it is in some way instructive.

To expand on this I refer again to Gramsci, for whom hegemony is both, “a distinctive synthesis of ‘domination’ and ‘direction’, or a dynamic equilibrium of force and consent.” As Perry Anderson suggests, “The hegemon must possess superior force of arms,” and “a national attribute that cannot be alienated or shared, as the first condition of its sway.” The hegemon must have some characteristic which sets it apart from the rest of its ‘competitors’. The US in the post-war environment clearly had the arms, with military facilities extending to some 132 countries, but it also had the peculiar ‘national attribute;’ the dollar itself.

II – The role of the dollar

The position of the dollar as the world’s main reserve currency and unit of account had become entrenched by the 1920s. The price of bread in the shops of Frankfurt to Berlin in Weimar Germany was decided by price of the Reichsmark to the dollar on any particular day. With Bretton Woods in 1944 the dollar’s position became institutionalised. This use of the dollar as the main reserve currency gave US peculiar privileges which benefitted its accumulation of even greater military power. The connection between the financial system and military power is one which is peppers leftist analysis of the post-war order.

The Vietnam War – the attempt by the US to utilise their military power to annihilate the government in Hanoi – had to be paid for. The US domestic public have long been averse to foreign interventions – save for in the aftermath of Pearl Harbour and 9/11 – and as such did not fancy paying additional taxes to see their working class youth mowed down in the jungles of Indochina. Taxation alone would struggle to pay for a war on that scale in any case –as a measure of scale, the US dropped more than 7 million tons of bombs during the Vietnam War, over twice the number dropped on Europe and Asia during WWII. This had to be paid for by foreign money and the debt crisis which was the immediate result of this war expenditure placed severe strain on the US gold reserves. This precipitated the decision to ‘float’ the dollar, turning the dollar into a variant of credit money. The US dollars, created by private banks, and no longer linked to gold reserves in any way, through acting as the world’s reserve currency accrued substantial economic advantages to the US and specifically to US capital.

The primary benefit of the dollar-reserve is the ability of the US to run up enormous deficits with impunity, giving the US, what Valery Giscard d’Estaing described as, an “exorbitant privilege.” Due to the huge US deficits large numbers of dollars circulate outside of the US and with convertibility gone, and therefore no longer redeemable for gold, there is very little that can be done by foreign treasuries with these dollars other than use them to purchase US Treasury bonds. Although these bonds are paid with interest, it is accepted that they are never really redeemed. As economist Michael Hudson points out,

‘To the extent that these Treasury IOUs are being built into the world’s monetary base they will not have to be repaid, but are to be rolled over indefinitely. This feature is the essence of America’s free financial ride, a tax imposed at the entire globe’s expense.’

This advantage of having all other nations trading using dollars, and the ability to print dollars, gives US capital supremacy. Money can be created by the Federal Reserve, exchanged for real goods and services from foreigners, then borrowed back by the US Treasury. Furthermore, the effect of low interest rates on the bond, coupled with inflation means that the bonds actually depreciate in value over time, adding a ‘seigniorage’ which is in effect a ‘tribute’ – a tax extracted from foreign nations who purchase goods using dollars. This gives US financial institutions – and those who control them- the ability to print paper money to exchange for real resources. The US thus guarantees itself a supply of goods and sets the terms to suit. The foreign currency reserves contained abroad have been paid for by transfer to the US of ‘really existing’ goods – things exchanged for paper. As Michael Mann elucidates,

‘It is finance which adds American hegemony. The dollar remains the world’s reserve currency and Wall Street trades two-thirds of the value of the world’s stocks and shares. Since values are ultimately denominated in dollars, much of the other nations’ reserves and savings are held in dollars. This means it offers only low interest rates, so that foreigners are essentially lending money to the US. Thus American consumers can amass large debts and American governments can finance massive trade and budget deficits. The poorer counties subsidise the American economy far more than they ever receive in US development aid. The US is the biggest debtor nation, a sign of strength, giving it a unique degree of financial freedom.’

This would certainly appear the ‘national attribute’ which Perry Anderson suggests is required for hegemony. And it is certainly a ‘national attribute’ which is held by no other country at this time.

The large trade deficit held by the US is part of the voluntary servitude which the globe is held in, and exemplifies the Gramscian notion of hegemony; this is subordination by consent. This deficit has effectively allowed the US to expand its military power. The ‘hot wars’ fought by the US during the Cold War – Vietnam the pinnacle – were paid for by Europe, a point which was understood by Giscard d’Estaing. The national debt which the US has accrued remains a military debt. The US spends more on its military than all other nations put together and is fundamental to the countries industrial policy, what Eisenhower called “the military-industrial complex.” It assumes such a large proportion of US government spending, that if taken away, ceteris paribus the US would not be in deficit. The dollar-reserve has created the US ability to operate foreign military bases, which would suddenly become very costly if not paid for in dollars, as well as the ability to pay for an advanced military infrastructure that can obliterate anywhere in the world within hours. It has also furnished the neoliberal tax cuts and the increasing military expenditure used to bolster US hegemony in the case of the military invasion of Iraq – essentially as part of a strategy to control the global oil tap –which simply continued this trend of US deficit spending from the 1970s. It is through this military power that US capital is able to enforce the dollar-reserve system, but it is through the dollar-reserve that the US is able to afford its military system.

III – US Cold War strategy in East Asia

Yet, many assume this situation cannot continue. It wouldn’t appear the most sustainable method to manage a complex system. The structural issues relating to the US economy -namely the debt – have apparently sown the seeds of its demise. This has recently been brought into focus as China is now on the ascent, its economic growth and large trade surplus the key indicators of Beijing’s new power. To understand how far this new financial power will alter the global balance of power, we must look again at the powers which have been accrued in Washington – the ideological, the economic, the military and political – and see whether there is any erosion of this through the replacement of Japanese, or European creditors with those from China. The primacy of the economic in any analysis of the nature of capitalist interrelations – a point that surely Marx would have agreed on – again brings my focus to the post-war economic situation.

East Asian growth, which had begun in Japan as a result of the Cold War US economic aid program, had been linked to the advantageous characteristics of the post-war mode of capitalist accumulation. The export led model of industrialisation had benefitted hugely from the unhindered access to foreign markets as part of the tariff reductions in light of GATT; the dominance of the liberal capitalist order emanating from Washington helped Japan and the ‘East AsianTigers’ through the ‘open door’. Wages were kept low through authoritarian governments in many of these countries who diverted precious resources into strategic sectors of industry. The low-wage low-price, export-orientated model of growth was far from a ‘miracle’ but was engineered as part of US Cold War strategy in the Asia-Pacific region. Moreover, these countries were never meant to challenge US interests, but were to remain subservient and assist Washington in its Cold War geopolitical strategy.

The East Asian ‘Tigers’ along with many other countries throughout the globe, adopted Washington’s neoliberal position; the ‘Washington consensus,’ – or rather had it imposed upon them – from the 1990s onwards. The US influence in global institutions, the IMF, the WTO, the World Bank, who have all promoted the neoliberal agenda of privatisation, deregulation, financialisation and up-ward redistributive policies – that is wealth redistribution in favour of the wealthy – which have been central to the continuation of US hegemony. Neoliberalism is an ideology which promotes the interests of the US, and in particular the US financial elites, as David Harvey notes,

‘US neoliberal imperialist strategies were articulated through a global network of power relations, one effect of which was to permit the US upper classes to exact financial tribute and to command rents from the rest of the world to augment its already overwhelming power.’

By fostering a neoliberal ideology amongst its client states, through its influence in global financial institutions such as the IMF and the World Bank, the US utilised its ideological and political powers to increase its overall dominance. The neoliberal policies that were ‘willingly’ adopted amongst certain governments of East Asia marked its assumption as the hegemonic order; neoliberal policies would solve the problems of the various crises of the 1990s. Neoliberalism was in their best interests. But as Harvey has shown, it was in no-one’s interests but US financial elites.This assumption of neoliberal ideology to the hegemonic order was to have a critical influence on the PRC as it began to undergo its domestic reform.

IV – The Chinese exception?

The PRC began to ‘open up’ to the West as a result of complex political and economic factors. By 1978, the PRC had established trade ties with the west to assist with its attempt to modernise the country. With the assumption of power of Deng Xiaoping, the country began to take a course towardseconomic reforms.Deng’s reforms shifted focus from Gosplan-style strategy to decentralised planning. Deng overhauled the PRCs inefficient command economy, instituting a number of market-based reforms. The goals of increasing managerial efficiency, productivity and responsibility were assumed to be best served through market competition. Intended initially as a temporary measure to deal with urban unemployment, small-scale enterprise was legitimised through the “theory of productive forces”, which suggested that any form of activity which made a positive contribution to economic development was permissible. This opened the door to private entrepreneurs, and started the PRC down the path towards ‘socialism with Chinese characteristics,’ or rather, “capitalism with Chinese characteristics” as Huang more aptly names it.

Chinese trade began to increase as the reform process evolved throughout the 1980s and 1990s, as the PRC looked to mimic the path to growth that the Chinese diaspora hadfollowed in Hong Kong, Singapore and Taiwan. China gained access to the major US dominated global institutions throughout this reform process, obtaining observer status in GATT in 1982, and joining the IMF and World Bank in 1986. The PRC relied on US support to increase its export trade, with the US neoliberal model of capitalism being influential on development, as political focus moved from equality to entrepreneurialism and to wealth over welfare. The PRC, some have argued, although the point is contentious, has adopted essentially straight-forward neoliberal policies as a core of their economic reforms. The large amount of state involvement in the economy, in terms of protectionism, nationalised firms and also bureaucracy many have cited as reasons against this claim. However, it can clearly be argued that neoliberal ideology has had some influence on reforms, and it cannot be denied that capitalist ideology has had a crucial influence on PRC policy.

As a result of the ‘opening up’ to the West, trade between the PRC and the US exploded, with America becoming the most important market for Chinese low-cost goods. Foreign-direct investment also boomed, with China becoming the leading destination for FDI by 2003, as many US firms have moved to invest into China. This undisputed economic growth and infrastructural improvement in China have had a powerful impact on global relations. The relationship with the US has clearly been altered. China, through sizeable export trade, has built a rising trade surplus with the US, investing this in US debt. This growth in foreign currency reserves have made “China a colossus in the financial world.” As Martin Jacques suggests,

‘The importance of this has become even more apparent with the Western financial meltdown. While Western financial institutions, many Western companies and even some countries have found themselves starved of liquidity, China, in contrast, is blessed with an abundance of it. Strategically this puts China in a potentially powerful position to enhance its international financialand economic influence during the global recession.’

Yet any position the PRC takes in financing the US deficit has effectively tightened its ties with the America. The position of China as America’s creditor has merely amplified China’s financial and market dependence on the US. As export-orientated industrialisation has been coupled with low domestic consumption, large trade surpluses and high rates of savings have enabled large foreign-exchange reserves to be accumulated. Chinese trade dependence is much higher than of the East Asian Tigers even, standing at some 25 per cent of GDP as of 2011. This appears to show China’s willingness to conform to the international currency system as its stands, with the US dollar as reserve, simply perpetuating the inequalities seen globally as a result. US hegemony is not challenged, but strengthened by this arrangement. Moreover the acceptance of capitalist accumulation as the main driving force of society – seems to point to perpetuation of US ideological hegemony.

This US dominance is continued by the export-orientated model which appears to be entrenched; a model which has been reliant on both contingent events combined with ‘capitalist’ PRC policy. The expansion of global trade since the 1980s and the outsourcing of manufacturing from the global north helped create the conditions which allowed this model to flourish. However, the model maintains its utility through careful PRC policy. Wage levels are kept low due to the supply of labour which is drawn from within the rural population. Despite the argument which suggests that this “reserve army of labour” is merely an effect of its huge demographic size, it is in actuality designed by CCP policies which continually ‘bankrupt’ the countryside causing enforced urbanisation through an interminable rural exodus.

Since the 3rd generation of the CCP Politburo, the government and the nationalised banks have concentrated investment within the industrial sector to the detriment of rural, agricultural sectors. This bias towards urban-industrial development has resulted at least in part, thanks to the dominance of urban-industrial political elite from the Southern coastal cities. This ‘elitist’ faction took advantage of China’s global trade, increasing their financial wealth through export, and gaining political influence as a result, eventually coming to dominate CCP policy to promote their own interests. The dominance of the ‘elitists’ ensured that policy was directed towards boosting export competitiveness and FDI, rather than any agricultural reform. In the wake of ‘Tiananmen’ in 1989, policy was directed even more towards boosting living standards in the cities, in aid of preventing further unrest, pulling resources from the countryside. (This, of course, is ironic given the historic revolutionary potential of the Chinese peasantry as the basis of CCP state power.)

These 1990s reform policies led to the destruction of the TVE (township and village enterprises) which were central to the rural economy and to a sharp reduction in rural incomes. This destruction of the agrarian economy has forced most of the rural youth to leave in search of employment. The agrarian sector was suffocated in favour of urban expansion. As Hung suggests, “there was a sustained and increasing net transfer of resources from rural-agricultural to the urban-industrial sector between 1978 and 2000, both through fiscal policy (via taxation and government spending) and the financial system (via savings and loans).” This bankrupting of the rural economy has forced the rapid urbanisation and the low-wage levels needed for export-industrialisation. Assisted by the ‘apartheid’ hukuo system of household registration which effectively reduces rural migrant workers to the status of illegal immigrants, this has also saved the government and employers on welfare provisions, keeping costs down further. These factors have been crucial to the growth of Chinese industry fuelled by its wage ‘competitiveness’.

Furthermore Joel Andreas argues that this continued process of ‘bankrupting’ the rural economy is a structural feature of the move towards capitalist modes of production. Andreas points to the inherent bias towards urban development which is contained within capitalism, suggesting

‘With the development of capitalist firms, the size of enterprises increases, the centre of economic activity shifts from the countryside to cities, peasants move to urban areas and cities expand at the expense of the countryside. Large capitalist enterprises are headquartered in cities, and successful rural enterprises move to cities as they grow. Jiang Zemin and Zhu Rongji did, indeed have an urban bias, but it was inherent in their preference for capitalism.’

The political decisions taken which continue to favour large scale capitalist enterprise, for Andreas, must as a consequence hinder the rural economy. This pulling of people into the cities through the bankrupting of the rural economy keeps wages low, but it also means there is a cap on domestic consumption, which is the only way Beijing can move away from export-growth. As Martin Jacques notes, to put it mildly, “China will have to attach greater weight to domestic consumption.”

V – A Chinese Alternative?

Being tied into this model of low-wage export-orientated growth has simply continued the reliance on the US. For any change to occur it would appear that the PRC requires – for better or worse – a consumer economy. To begin the sale of goods on a wide-scale to its own population, it would appear that the PRC would be required to undermine its own wage stagnation in order to free up disposable incomes, or to enact large-scale welfare provisions in order to reduce saving levels. Yet this does not appear to be happening, the proportion of domestic consumption as a percentage of GDP has declined rapidly to under 40 per cent of GDP.

Although policies such as minimum wage rises have been introduced to increase domestic consumption, focus has still been on maintaining export growth and FDI for the benefit of the ‘elitist’ faction and their supporters – of which China’s new leader, Xi Jinping, is a member. (It should be noted in light of the Bo Xilai purge, the nebulous factions of the CCP hierarchy have become even more difficult to interpret – the path of the Politburo’s 6th generation is far from certain.) However, the Eurozone crisis and the US slowdown have focused China’s leaders for the moment on maintaining growth as priority rather than any restructuring. With the onset of the global crisis of 2008, the PRC rolled out a mega-stimulus package amounting to $570bn in 2008, the majority of which went to investment in industry that was designed to protect the profits of the coastal elite rather than rebalance the economy. The CCP has resumed export-promotion measures such as rebates on value-added taxes on exports and the prevention of the appreciation of the renminbi. As such, the calls from Beijing to move towards increasing domestic consumption have been hollow, with economists “sceptical that the government’s ambitions on rebalancing the Chinese economy would be met, especially as Beijing has made similar commitments for nearly a decade.” This only goes to add to the suspicion that the CCP leaders want nothing less than to disturb their mutually beneficial relationship with the US.

The failure to promote domestic consumption suggests that any move to break the export-driven trade surplus cycle is unlikely. An economy addicted to exports, combined with political influence of the urban-industrial elites, is responsible for preventing the transformation of China into a nation of consumers. And as long as the relationship between the political-business elites in the US and China remains mutually beneficial – they are after all “kindred spirits” – then US global hegemony will remain unchallenged.

Yet, some suggest that it is through the existence of this export model and specifically the vast foreign currency reserves that have been accrued which actually gives the PRC the ability to end the dollar-reserve system, a ‘national attribute’ all of its own. Martin Jacques suggests that if China transferred those reserves into other currencies, such as the Euro, then the value of the dollar would crash, thus raising interest rates in the US. Much of the US economic strength is reliant on the both low-interests rate, in respect of growth as much as ‘seigniorage.’ The US economy would falter and the resultant devalued dollar would ultimately lose its position as reserve currency. Jacques argues, the dollar would be replaced by the still inconvertible renmimbi. There are a number of problems with this suggestion, over and above its current inconvertibility.

Firstly, Jacques himself notes, that the existence of enormous dollar-denominated investments has locked Chinese political-business elitesinto “a position of bizarre mutual dependence.” For the Chinese to convert dollars to another currency in an effort to diversify, it would see the value of its remaining dollar assets fall as the dollar was devalued. The resultant decline of the US economy would also see its export market reduced; a market which it is still reliant on. Furthermore, if this was to coincide with an attempt by American consumers to reduce their indebtedness, a Japanese style deflation occur leading to a global deflationary spiral. These are clearly factors which would seem likely to harm the Chinese economy and as such Beijing would currently be unlikely to pursue this strategy. There is no need for China to rock the boat. The PRC has accepted the ‘need for coordination’ under US hegemony at this juncture.

VI – China’s contemporary commercial position

In the aftermath of the 2008 global crisis, China has continued its growth trend, whilst the US, European and Japanese economies have struggled. China has overtaken Germany as the largest exporter, and the top three banking firms are now Chinese. The financial crisis was suggested as the point when Chinese companies “will become an increasingly formidable global force.” Yet Chinese firms face many challenges in overthrowing the dominance of Western, and in particular American, corporations.

The process of globalisation has been argued as being beneficial to the developing world, it has opened up markets for indigenous companies to compete with the developed economies. Yet this period has witnessed a great deal of concentration and consolidation within industry sectors, seeing most sectors, from aircraft engines to PCs to construction equipment, having market-share dominated by a handful of firms. As Nolan and Zhang elucidate,

‘In this context, well-known firms with superior technologies and powerful brands have emerged as ‘systems integrators’, at the apex of extended value chains. In the process of consolidating their lead, these giant companies exert intense pressure upon their suppliers, further increasing concentration as components’ firms struggle to meet their requirements. This ‘cascade effect’ has profound implications for the nature of competition and technical progress. It also means that the challenge facing firms from developing countries is far greater than at first sight appears. Not only do they face immense difficulties in catching up with the leading systems integrators…They also have to compete with the powerful firms that now dominate almost every segment of global supply chains.’

Companies from China are currently attempting to compete at a global level in the face of unparalleled corporate power in the ‘globalised’ world.

This industrial consolidation has only increased in the aftermath of the financial crisis as dominant firms have seized opportunities to purchase devalued competitors. The continued mergers and acquisitions activity since the crash has reflected increasing moves towards sectoral oligopoly which has occurred in financial services, pharmaceuticals and mining, amongst others. This has served to prevent competitors from ‘developing’ countries, including the PRC, from entering those global markets.

Chinese financial institutions – including its state-owned banks – have attempted to become more international in their operations as investment has flooded in from abroad. But the PRC’s financial institutions were not involved in the frenzy of acquisitions which took place in the wake of the collapse of Lehmann Brothers. Whilst two of China’s banks are ranked within the top 20 largest companies in the world in terms of market value, none are within the top 50 in terms of geographical spread of assets. The lack of involvement in the global financial sector for Chinese companies places a limit on the power that the PRC is able to exert. Whilst Beijing holds some $3.2tn foreign currency reserves, the market capitalisation of the top 15 US firms alone amounts to over $3.2tn, and the top 500 investor funds control some $60tn, of which these are predominately located in the United States. All this shows that despite the enormous sums of money controlled by Beijing, these are in some ways insignificant compared to the combined financial power of US finance and US corporations in terms of global influence.

In the years since the opening up of China, from 1980 to 2008, companies from the developed world have increased the level of FDI to China as encouraged by CCP ‘elitist’ policy. And whilst the PRC has also increased its level of FDI, it remains small. In 2008 the combined FDI of the BRICS –Brazil, Russia, India and China – was less than half of that of the Netherlands. China’s total outward FDI amounts to only a small percentage of the total value of foreign assets held by one of America’s leading multinationals such as GE. Large firms from the United States and Europe are deeply embedded within the Chinese domestic economy, but Chinese firms are almost absent from the ‘developed’ world. And whilst some Chinese firms, such as Lenovo, are within the top 5 companies in their field, it is a big jump from operating in a protected domestic market to dominating the global market.

VII – Conclusion

This corporate and financial dominance of US corporations would seem to suggest that in the current international system it seems difficult to understand where US hegemony is currently being decisively challenged. The power of US military and economy, combined with its neoliberal ideology and its influence within global political institutions, have meant that its global competitors are in basic agreement with the system as its stands. The United States as hegemon, the ‘coordinator’ of the current system ‘provides in everyone’s best interests,’ or at very least its serves to promote the interests of the financial and political elites globally – as much as the financial and political elites of its own nation – to ensure that its position is not challenged.

The CCP politburo appears to fit into this pattern. As long as it makes some concessions to its workforce, such as the minimum wage rises, and there are some improvements on poverty indicators, the country is likely to remain stable, and their autarky will continue unchecked. To best way to fulfil this currently relies on a continuation of economic growth and a continuation of the export-model. This is the very model which locks the PRC into the current global financial system and preserves US hegemony. If different policy directions are taken by the CCP, or if some further stock market calamities hit the value of the dollar – both outcomes which are not impossible – there may be a change to the current order. But as it persists global relations are dominated by the United States, and despite the growth of China, the US position does not seem to be under threat any time soon.

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