Diplomatic tensions between the People's Republic of China (PRC) and the United States (US) did not end when President Donald Trump, fervent advocate for a trade war with Beijing, left the White House in January 2021. On the contrary, tensions have continued into the first year of the Biden administration, through the first months of the Russian invasion of Ukraine and will likely last until the end of Biden's mandate. Indeed, if Trump made China into an almost personal issue for him and his inner circle of advisors, Biden, with a more institutionally sensitive style, has sought to bring the most important agencies of his administration under a coordinated effort. A resolute and comprehensive stance towards China has now become a long-term policy of the US. Likewise, on the other side of the Pacific Ocean Xi Jinping, communist party high officials and foreign minister Wang Yi demonstrated little intention of making any meaningful progress in US–China relations by accommodating some of the long-standing American requests. The fallout between American and Chinese top diplomats at a summit held in Anchorage (Alaska) in March 2021, weeks after Biden was sworn in, signalled that the relationship has a long way to go before any positive developments are seen. The drama of the Ukraine war, furthermore, made it unpalatable for many countries to maintain normal relations with Russia. This put China's relationship with Russia under the spotlight and encouraged the US, the European Union (EU), and G7 members to exert pressure on Beijing for picking a side, the message being: you are either with the West or with the war criminals of the Kremlin.

The frenzy that the word “China” tends to provoke in Washington was captured in an opinion piece in The Atlantic by former national security advisor Herbert R. McMaster published at the end of 2020, a tense year in US–China relations. He emphasized that there had been a sort of revelation moment about China, stating that assumptions in the rest of the world about China's modernization “were proving to be wrong” (McMaster 2020). To McMaster, China is a threat because it is governed by an authoritarian model that it exports abroad; meanwhile, the PRC bends the rules of the international order and exerts military influence over the South China Sea, Taiwan and the East China Sea.

In the first years of the twentieth century, the passage of hegemonic power from British to American world leadership did not lead to a direct confrontation between the declining and the rising great powers. Historians of international relations are still debating why this is the case: because of cultural similarity and shared historical experience; or because London saw Washington as a lesser evil compared to Germany, Japan and the USSR; or because the competition within the Anglo-American sphere of influence was economic rather than military (Hugill 2009).

There were important reasons for the two great powers not to fight one another. Competition and mistrust also characterized this relationship, but for Washington and London it was easier to overcome the contradictions caused by the liberal international order (LIO). Managing a power transition, however, is more challenging when it comes to Sino-western relations in today's globalized world.

The intersection between capitalism and an international system of states is the backdrop to two important historical processes which are fundamental to understanding why China poses a challenge to the West. In particular, this chapter deals with the combination between western capitalism and national political systems that are not capitalist or predate capitalism and that have contributed to socio-political hybridity in the international system; it also seeks to make sense of the geoeconomic unevenness caused by a globalized capitalist order which is the source of great powers’ rise and fall.

Two main points emerge from this discussion. First, China's hybridity is not a unique phenomenon but has to be contextualized in a world order and a region – Asia – which is diverse and where democracy has not put down solid roots, as many liberal thinkers had hoped. Second, the rise of the People's Republic of China (PRC) confirms patterns that have characterized the ascent of other capitalist states, albeit with certain Chinese peculiarities and on a remarkable scale.

The first two chapters of this book sought to set the historical and institutional contexts which have facilitated the rise of the PRC, and that have led to a complex relationship between the latter and the West. The third and fourth chapters, however, have sought to flip the perspective and to look at the challenges faced by China amidst growing engagement with a LIO dominated by the West. This final chapter looks at recent events by providing an illustration of the conundrum faced by some western countries in the making of their China policy. It shows how dealing with the PRC has stressed the balance between economic and security interests, required countries to operate a course correction after years in which economic interests were prioritized, and led to a degree of strategic ambiguity.

Since the early 2010s, when Obama formulated his “pivot to Asia” policy, the feeling that the world was already too small for both Washington and Beijing was tangible. Yet, in the second half of the decade it became clear that while the US, with Trump's hawkish approach, was at the forefront of what seemed to be an anti-China crusade, other countries followed the US. At times pressured by the White House, at times concerned for their domestic security and values, other members of the international community implicitly admitted that an acritical, two decades-long neoliberal policy towards the PRC was no longer viable. These countries all started to believe that the quality and intensity of exchanges with China required stricter rules, although implementing this principle remains challenging. Authoritative commentators coined the phrase “new Cold War” to describe wide-spreading tensions in Sino-American and Sino-western relations and to highlight what, over the past five years, has clearly become a negative spiral in them. However, in some cases it remains to be seen whether there has been a real, substantial shift away from neoliberalism in these countries, and from a China policy dictated by economic rather than security interests.

At the end of the 2010s, Martin Jacques predicted China would “rule the world” and the “end of the Western world” (2009). Elsewhere I argued that Jacques's claim about a new world order is materializing (Leoni 2021: ch. 4). Yet, it is too soon to confirm Jacques's claims, especially about China ruling the world. About a decade ago, David Shambaugh disagreed with Jacques because “China has an increasingly broad ‘footprint’ across the globe, but it is not particularly deep” (2013: 5–6). Apart from some important exceptions, China's economic presence in other countries is not enough to provide Beijing with structural political leverage, unlike that of the US, which has become hegemonic through the dollar. On the other hand, the PRC can damage certain industries in other countries and indirectly exert pressure on governments; furthermore, while China's economic expansion remains superficial it is growing fast as the eurozone struggles to emerge from more than a decade of financial austerity. This has led both China hawks and the media to suggest that the PRC is committed to a sort of neocolonialism through investments and acquisition of foreign assets. There certainly is an element of truth in this, as I explore below, but one has to consider both sides of the coin. This chapter argues that while China has eroded the West's productive power in some areas, its success remains limited and uneven. This argument balances some of the claims set out in Chapter 2, but also making the reader reflect on the complexity of China's rise to great power. Here and in the following chapter, it is shown that ultimately, operating in a LIO is no picnic, that is, it offers challenges and not just success. This is even more the case at a time when the West has started to see the drawbacks, in addition to the benefits, of interacting with China.

THE BELT AND ROAD INITIATIVE AND OVERSEAS INTERESTS: CHINA GOES GLOBAL?

Since 1978 the PRC has used its foreign policy to protect its path towards development from both external interferences and military invasions.

In reflecting on the strategic mistakes of the West in its relationship with the PRC, we have observed that these flaws originated from short-sighted policies, but also from the fact that China, for the West, poses an economy-security dilemma. The West's delay in coming to this realization has led to the erosion of the LIO. In the following chapter, I focus on the conundrum facing China that has arisen from the intensification of its relationship with the outside world. Indeed, the LIO is not only a source of dilemma for the West in the face of a rising China, but it has become a source of tension for China itself. Capturing opportunities abroad requires opening the national economy to global capitalism. Yet, deeper integration with the global order will make the PRC's borders more porous to American, European and South Korean businesses, and to western ideas more generally. This threatens to undermine the internal political and cultural hegemony of the Chinese Communist Party, which will have to scrutinize and, if necessary, restrict China's engagement with the world. The PRC elite will have to carefully weigh up whether they want to expand or retrench from certain international commitments, whether this means convincing different foreign constituencies that Beijing is keen to fight climate change and the environmental crisis; or deciding the extent to which China's military power should be employed abroad. It is unlikely that the CCP will find an answer to these dilemmas any time soon, and China's rise as a global power could make it more difficult to work out a coherent path.

DOES CHINA WANT TO DISMANTLE THE LIBERAL ORDER?

The journal International Organization celebrated its 75th anniversary in the spring of 2021 with a special issue dedicated to the LIO. The journal and the LIO came into being at roughly the same time. In the opening article, the authors asked whether the rise of China is “a fundamental challenge to the LIO, or has the country been sufficiently co-opted into the order that it is now a ‘responsible stakeholder’?” (Lake et al. 2021: 241). This is a worthwhile question because the socio-political hybridity that characterizes the PRC has implications for how China integrates with or detaches from the LIO.

There are four main lessons that stem from this exploration of Sinowestern relations, in addition to some more tangible recommendations that can be inferred from these. This book has showed that it is not possible to discuss or even think about the modern or contemporary history of China without considering its relationship with the West. Since the First Opium War, China's trajectory has been influenced by the West, sometimes for good, sometimes for ill. European, American and Japanese imperialism, and open-door policies have contributed to China's desire for catching up and playing hard in a competitive international system of states. The US, since 1972, has actively supported efforts of the PRC to become a prosperous country. Likewise, there is no modern history of the West without discussion of China. Without the meeting between Mao and Nixon, the Cold War might have lasted longer; without Deng Xiaoping's reformist agenda, the LIO would not have been global from an economic point of view.

Currently, both China and the West, especially the US, are locked in a problematic interdependence which has led them to consider options for decoupling and recovering national sovereignty over different aspects of economic and social life. Indeed, while the liberal order has trapped the West into a China conundrum, the more China engages with this order the more it faces dilemmas between competing interests. If current diplomatic quarrels between China and the West worries us a lessening of such interdependence through decoupling could lead to a degree of geopolitical stability, because interdependence remains a source of tensions.

Another major historical lesson concerns the need to look at history in the longue durée. In 1972 Nixon and Mao were agreeing on a process of “rapprochement” between Washington and Beijing, which led to “normalization” under the Carter administration, and which allowed both powers to survive through events that shook the fundaments of the relationship – Tiananmen Square (1989) and the Taiwan Crisis (1995–96). By the standards of contemporary western-centric pundits, this seems like an age ago. Yet, in only a few decades we have managed to move from the Cold War to a time of potential order-unravelling and to the brink of a new Cold War, or the return of great power politics at the very least.

World history cannot be regarded as the sum of disconnected events. More often, it is the product of encounters between different, competing civilizations, political systems, and technologies and the tensions that exist between them. Although the Chinese elite were committed to making China great and deserve credit for the success that the PRC achieved in the post-1978 era, the West played a fundamental role in bringing it into a world capitalist economy. China's success can also be interpreted through the lens of “blowback” of European and Japanese imperialism, but most importantly US globalism. Technically, “blowback” is used by the Central Intelligence Agency (CIA) to describe the unwanted consequences of covert operations. Subsequently, it was applied by political scientist Chalmers Johnson to reflect the unintended effects – backlashes – of US foreign policy. To Johnson, “acts committed in service to an empire but never acknowledged as such have a tendency to haunt the future” and the US “cannot control the long-term effects of its policies. That is the essence of blowback” (Johnson 2002: 8, 13). This concept is essential to appreciate the responsibility that the United States’ strategy-makers had for encouraging the rise of China while overlooking its long-term strategic implications.

Blowback, however, is also a constant feature of empire. Imperialism's coercion, disruption, and lack of respect for other countries or regions tend to have unpredictable and perilous consequences decades or even centuries later. China has become a great economic and military power because European and Japanese powers, even before US hegemony, had a hand in her formidable ascent. Indeed, the continuum from the eighteenth century up to China's entry into the WTO in 2001, has been that of western powers seeking to open up the Chinese economy to the world in order to profit from it. As different parts of this book show, this has come at a geopolitical cost. For good or ill, the foreign policies of imperial Britain, Japan, France, Portugal and Germany, but also the United States, have had far-reaching effects on China's process of political renovation.

China is a huge country, with a very long history, and an increasingly global influence. The implications of its domestic and foreign policies are far-reaching. Tracking everything China is or does is a mammoth task and most observers tend to do so by focusing on a specific research area or a specific angle. I am not different in this regard.

The perspective I have used to look at China follows my professional story of the last few years. It is based on an underlying claim, which might well be the most important statement in this book: it is not possible, I argue, to study modern and contemporary China in isolation from its relationship with the West. This is because China's struggles and successes over the last two centuries are closely linked to western policy towards China – at the same time, the rise of a western-led global economy, and the end of the Cold War might not have been possible without China. Studying China through the lenses of its relationship with the West means approaching this subject with a pragmatic – strategic – logic, rather than for the sake of knowing more about China.

This is the perspective that I have developed over the last four years and that has informed this book. From an academic point of view, my interest in China began with my PhD at the Department of European and International Studies, King's College London where I completed my thesis on US–China relations. More specifically, my objective was to analyse the foreign policy of the Obama administration towards China, applying a Marxist theory of imperialism, which involved looking at American grand strategy from a critical perspective. Between 2017 and 2018, between the final stage of my PhD and my first year of a full-time job, I realized I wanted to focus more on the Chinese perspective of the relationship. First, when studying the logic of the Washington Consensus, I realized that I needed a better appreciation of what was behind American disappointment towards China. I found an answer to this question, eventually, by exploring in depth the symbiotic – nationalistic – relationship that exists in the PRC between the state and society, in particular between the state and the strategic industries.

The Russian economy has always served the foreign policy needs of its leaders by providing the capabilities necessary for securing power at home, expanding the country’s borders, and staking its claim as a great power. The previous chapter showed that the Russian economy nevertheless has, on occasion, posed a national security risk by dragging down growth such that keeping up with competitors while maintaining domestic stability has proven difficult for Russian leaders. In those dire situations, they have permitted the adoption of a pro-market orientation to provide the boost necessary to alleviate specific crises. Vladimir Putin found himself in similar situations to his predecessors, but his recourse to the market has declined over the decades he has spent ruling Russia. Whereas his direct predecessors Mikhail Gorbachev and Boris Yeltsin found themselves in economic crises and sought high-risk strategies to grow their way out of trouble, Putin has instead accepted the tradeoff of lower economic growth in exchange for greater political stability. This is the same strategy earlier pursued by Joseph Stalin and Leonid Brezhnev to increase resilience to external shocks and rival powers. Like Stalin, Putin has prioritized increasing political centralization and resiliency; like Brezhnev, Putin relies on energy revenues to buttress state capacity.

This chapter tells the story of Putin’s economy in two broad ways while later chapters delve deeper into the mechanics of the contemporary economy. First, it places the contemporary Russian economy in comparison, with respect to the baseline figures countries usually measure themselves against, to the other states Putin has considered Russia’s peers: the United States, China, Japan, Brazil, Germany and India. At the broadest levels, these baseline figures include gross domestic product (GDP), GDP per capita, and GDP in purchasing power parity terms. At more specific levels of the economy, international comparative statistics for Russia and those states in workforce participation and productivity tell a worrying story in the long run.

Peter the Great’s first task in establishing an imperial state was to find a way of formalizing the relationships between the nobility and landowning class, existing but weak state institutions, such as the treasury and tax collection, and the thinly distributed class of bureaucrats governing Russia. The pre-Petrine state commanded a vast territory that was under-governed and institutionally backwards relative to other European imperial powers. Fiscal and financial power was decentralized among tens of regional chanceries managed by individuals appointed by the tsar far from the royal court. Informal networks between merchants, state officials, the nobility, and the royal family held the state together. Peter sought to build an imperial state modelled on European empires’ formal institutions. He did so, but instead of eliminating the informality of Russia’s governance, he imposed a formal structure onto it. A newly centralized treasury and state bureaucracy provided the facade of new institutional structures, while much business continued as usual “under the rug” and traditional informal practices of power continued in modified forms. Over 300 years of reform efforts in Russia since have proven that combining formal institutions with informal power networks has endured up to the present day and have shaped why pro-market economic reform always appear attractive and are never pursued to their completion. Varying means to solve the problem of under-governance and the split between formal and informal institutions have been deployed over time, and in this chapter the pattern is laid bare from the end of the nineteenth century to the present.

This chapter begins with the end of the nineteenth century because that is when Russia first encountered globalization that provided a true challenge to its traditional autarchy and mercantilism. As contemporary Russia emerged from the inheritance of its medieval past and the growing rivalry with the liberal states of Western Europe, during the tumultuous nineteenth century, Russia’s absolutist model proved successful in the war against Napoleon when its leaders were willing to abandon Moscow and let the Russian winter defeat the French army.

The basic argument of this book has been that Russian political culture is based on leaders optimizing for political stability instead of for economic growth. The first chapter outlined this tension between power and the market through a series of leadership lessons from Russian history. Chapter 2 outlined how, at several points in modern history, Russian leaders adopted market-oriented mechanisms to boost growth when external or internal security, political, or economic conditions threatened that stability, betting that market reforms could be adroitly managed not to threaten political stability. Leaders, from Nicholas II to Vladimir Putin, accomplished this task (mostly) successfully by delegating the reforms to subordinates (reformers), which permitted those leaders the latitude to assess the economic and political consequences of reforms and thereby maintain or end those reforms through personnel moves by keeping the reformers in place or removing the reformers, respectively. The key evidence to the contrary was the experience of Mikhail Gorbachev, who attached his personal brand and prestige to far-reaching economic and political reforms. When those reforms did not produce the success he wanted, he generated opposition from across the entirety of Soviet society: hardliners who felt that the reforms had gone too far and were threatening the Soviet Union’s international position; liberals who felt the reforms did not go far enough in ending the Communist Party’s monopoly on power; and nationalists who wanted freedom from Moscow’s dominance, including, in the end, Russian nationalists who wished to jettison the other economic drain imposed by the other republics. When all of Gorbachev’s opponents agreed that the status quo no longer served their interests, Gorbachev started to face challenges to his leadership that brought the entire Soviet socialist political system to an end.

Chapters 3–5 explained how the current Russian leader, Vladimir Putin, identified Gorbachev’s sincere enthusiasm for reform as the key reason the Soviet Union fell apart. They then explained how Putin rebuilt a system founded on resilience to external and internal challenges that would have been acutely familiar to the Soviet and tsarist leaders who ruled before Gorbachev: Putin optimized political stability by maximizing the extent of the state’s role in the economy and eliminating competition to the state from the international economy, from elite sectors of society, and from the population at large.