Does China's rise mean the downfall of American Hegemony? What does this mean for East Asia?

In this essay that I wrote in May 2022, I challenge and discuss Christopher Layne's claim from 2018 that a risen China will spell the end of the "Pax Americana" and how this could have implications for power politics in East Asia.

Could a risen China spell the end of the Pax Americana and how would this implicate power politics in East Asia?

Post 1945, the world order has been dictated by the United States through the Pax Americana through employing 4 specific pillars. These pillars being America’s economic, military, institutional and ideational power that have allowed Washington D.C. to dominate the world order.

However, the People’s Republic of China has experienced a seemingly unmitigated rise that has begun to challenge these pillars that uphold the Pax Americana. Therefore, it is logical to agree with Layne’s claim that China may replace the United States by successfully dismantling these crumbling pillars. Conversely, scholars such as Ulrich Menzel reckon that it could be in Beijing’s interest to maintain these pillars and not end American hegemony.

Therefore, the objective of this essay is to both argue for and against Layne’s claim by presenting both sides of the argument and how China’s rise has already begun to reshape power politics in East Asia. In addition, the essay will also question the arguments as to how the Pax Americana may persevere in face of China’s rise.

The structure of this essay will first focus on Layne’s claim and then assess how power relationships are being affected by China’s rise and how the resulting regional order may appear if China does end the Pax Americana.

Is a risen China the end of American hegemony?

When assessing Christopher Layne’s claim, it is critically important to consider why this perspective exists. China’s path to great power status since Deng Xiaoping opened the economy in 1978 and the unmitigated exponential of China’s subsequent rise since then has without a doubt changed the world (Breslin, 2009).

Meanwhile the United States has experienced an erosion in its position as the global hegemon. In parallel China has been challenging the four pillars of the Pax Americana directly in which it has increased both its hard and soft power capabilities (Layne, 2018). This has made certain experts believe that a risen China will spell the end of the Pax Americana.

When considering China’s rise to great power status, it seems inevitable that the Pax Americana will end. Economically, China is threatening American economic supremacy. China is the 2nd largest economy (US$ 14.72 trillion in 2020) and is the largest trader and manufacturer (Dollar & Hass, 2021). In 2019 alone, China accounted for 28.7% of global manufacturing output (Richter, 2021). Apart from dominating trade in East Asia, in 2020 alone, China traded US$ 516.9 billion with ASEAN countries compared to US-ASEAN trade only being US$ 154 billion (Fung, 2022). Regionally, in 1993 China accounted for 2 percent of ASEAN trade compared to the US accounting for 18 percent. However, in 2013 China accounted for 14 percent and the US only 8.2 percent (Layne, 2018). In certain fields, China is surpassing the United States especially in Purchasing Power Parity (PPP) where China in 2014 surpassed the US (Layne, 2018). Furthermore, China is the second largest creditor to the United States after Japan in 2020 (around US$ 1.1 trillion) (Timsit, 2020). It is predicted that by 2035, China will have surpassed the United States as the world’s biggest economy (Menzel, 2021). Economically, it seems inevitable that China’s growth and America’s decline will continue.

China has increased its military capabilities significantly. Presently, China has the largest navy and standing army in the world. The PLA’s budget has also experienced double digit annual increases in an attempt to modernize and potentially rival the US military. It is expected that the Chinese military will become a “world-class military” by 2049 (Office of the Secretary of Defense, 2021). Beijing is on the path of ensuring this prediction as China is the second largest defence spender of around US$ 245 billion in 2020 (with an 800% increase since 1992) after the United States (around US$ 767 billion in 2020) (Buchholz, 2021). These rapid advances in the defence department have led to the US acknowledging China as a “strategic competitor” (Del Toro, 2021). To certain critics, it may seem that China’s military expansion is the end of American military hegemony. Furthermore, China’s unprecedented rise in the field of technology will and has already begun to implement geopolitics which could have global ramifications for the West and undermine the hegemonic position of the United States (Tatlow, 2021). This growing technological rivalry has threatened the position of the United States as the “technologically dominant power” that it has held for decades (Chhabra, et al., 2020).

Institutionally, China has been shadowing America through Chinese led institutions such as the Asian Infrastructure Investment Bank in 2015 (AIIB) and the One-Belt-One-Road (OBOR) development initiative (Layne, 2018). These institutions could be vital in increasing China’s global influence and have already begun to challenge Washington for Eurasian dominance (Menzel, 2021). The fact that China is investing heavily in these institutions proves that Beijing is manoeuvring itself to replace Washington as it would not be in China’s interest to follow an international order that is designed to privilege American interests, norms, and values (Layne, 2012).

According to Takashi, China is not only a large regional investor but internationally as well. The total amount of Chinese development funding has outpaced the funding provided by the World Bank (Takashi, 2012). Therefore, with regard to soft power, Chinese led institutions such as the AIIB and OBOR have the possibility in the future of outmanoeuvring American led institutions such as the IMF and World Bank. It has even been argued that through these institutions such as the AIIB and CICA (Conference on Interaction and Confidence Building Measures in Asia), Beijing is recreating its own San Francisco System (Jaehyon, 2015). A multitude of indicators show the shifting of power from demands for reform by China in the IMF and World Bank to the expansion of the G8 to the G20 to include China in 2008 (Layne, 2018). China’s ever growing and emerging market has definitely shifted the power balance from West to East and the creation of a “shadow” international order outside of the Pax Americana framework through the AIIB, Shanghai Cooperation Organization, the Eurasian Economic Union and the BRICS (even though the power and impact of these institutions is still uncertain), whilst at most a symbolic shift in power, they are an indication of American decline (Layne, 2018).

From an ideational perspective, following the Great Recession (2007-2009), the collapse of the American financial system was a humiliating meltdown that has damaged America’s ideational power and status (Layne, 2018). The success of China as an authoritarian state in a world order dominated by a liberal democratic hegemon critically undermines the United States and the “Washington Consensus” (Layne, 2018). China’s success has made the model of the bureaucratic development state more popular among authoritarian systems in Africa, Asia and even in Eastern Europe compared to the West’s liberal democratic and free market orientated system. This has only strengthened China’s soft power (Menzel, 2021).

Therefore, it is feasible to agree with Layne’s claim as the facts, figures and arguments put forward by other Scholars point to China spelling the end of the Pax Americana.

However, there exists the argument that the United States is itself responsible for its own decline as the global hegemon and a risen China may not be the only factor that spells the death of the Pax Americana. The claim made by Declinists in the 1980s has come to bare fruition - the United States has seen a decline in its role as the global hegemon since the end of the “bipolar” era with the Soviet Union when the latter dissolved in 1991 (Layne, 2012). The idea that the liberal, rules based international order (LRBIO) facilitated by the USA has led to a power shift from West to East and including the “termite-like” decline of the American economy, points to the notion that Washington is responsible for its own decline (Layne, 2018). These financial challenges should ideally be addressed but in doing so Washington would cut the spending needed to maintain its hard power which would be detrimental to its hegemonic status (Layne, 2012). In the meantime, China has been able to flourish and the fact that major allies such as Germany and the UK have joined the Chinese led AIIB prove that Washington’s influence is not what it once was. This shows that the LRBIO that has been part of the Pax Americana has allowed other countries to develop into great powers which in turn has diminished the influence of the United States. Furthermore, China’s highly indebted local governments, non-financial corporations and its shadow banks could impede this rise due to the possible implications (if not addressed) to the financial stability of China in the long term (Sun, 2019).

It is difficult not to mention the hegemonic stability theory when discussing the demise of the Pax Americana. Theoretically, the hegemon is supposed to foster and safeguard a smooth functioning economy and the lines of communication that the international economy needs to survive (Layne, 2018). However, this has allowed other countries to grow into great powers i.e., China which undermines the supreme position of the hegemon. Therefore, it could be argued that the United States has brought its downfall on itself through globalisation and fostering an open international economy that it cannot support anymore.

From a Primacist perspective, the decline of the Pax Americana is greatly exaggerated (Layne, 2018). Menzel argues that it may also be in Beijing’s interest to uphold American hegemony as the Chinese economy benefits from the economic bonuses provided by the Pax Americana (Menzel, 2021). The United States have recognised Beijing’s intent and may therefore adapt through a potential “lock-in strategy” that would see a reform in American led global institutions that could perhaps encourage Beijing to contribute to upholding the “post-1945 international order” (Layne, 2018).

When considering Layne’s claim and the evidence that supports the claim. The scenario of a risen China ending the Pax Americana seems logical. Conversely, the argument also exists that the United States is responsible for its own decline, or the future possibility of American led institutions being reformed in order to uphold its position as the global hegemon.

The possible implications of Layne’s claim on power politics in East Asia

If a risen China does lead to the end of the Pax Americana, it is expected that power politics in East Asia would experience a significant change in the power relationships of the region (Breslin, 2009). It would be understood that the San Francisco System would erode as countries such as Japan and Australia would question their political stance due to their economic dependence on China, which as Layne points out is already occurring (Layne, 2018). The Philippines, Myanmar and Cambodia have already moved away from the United States due to their economic dependence on China. It is evident that China’s rise has already begun to reconfigure power relationships in the region (Layne, 2018). Beijing’s economic influence has reshaped geopolitical interests in East Asia which has affected regional power politics. Thus, it would be expected that if a risen China were to end the Pax Americana, Chinese interests would dominate the region pushing the United States out. China has already begun to do this through regionally led institutions such as the Regional Cooperation Economic Partnership. Dominance in ASEAN trade and being a global and regional manufacturing hub has made East Asian states that benefitted from American hegemony question their relationship with Washington D.C.

China has already begun to replicate the San Francisco System in Asia. It is evident that a risen China will dominate the region (Jaehyon, 2015). Evidently, the San Francisco System would not be able to guarantee the security that its bilateral security treaties have provided to Japan, South Korea, the Philippines, Thailand, and other countries (Takashi, 2012). Therefore, this would give China the pretext to push its agenda in the South China Sea and Taiwan as the United States would be too weak to protect the interests of its Allies. Additionally, as seen by how power politics in the region has begun to change, countries previously allied to the United States may not oppose China due economic reasons.

China has already changed power politics in the region through its economic power. Countries such as Myanmar and Laos depend on Chinese investment and trade as seen by how Chinese assistance to Myanmar was worth between $400 to $800 million from 2007 – 2009, and in Laos new-town developments outside Vientiane were possible through Chinese economic assistance (Takashi, 2012). China has already begun to manoeuvre itself to fully expel American influence out of the region, regardless of whether it ends the Pax Americana or not.

To summarise, if a risen China were to end the Pax Americana, it is most likely that geopolitics in East Asia will be transformed, and transnational relations will change. Furthermore, Chung also proposes that China’s rise will lead to a new regional order as well as a transition of power between the United States and China within East Asia (Chung, 2016).

Conclusion

Given Layne’s claim, China’s rise into a great power has already begun to implicate power politics in East Asia. Therefore, it is logical to agree with Layne that a risen China could spell the end of the Pax Americana. However, the idea that China’s rise will be solely responsible for the end of the post 1945 order is debatable. When considering, the liberal, rules based international order that Washington D.C. has facilitated or the termite like decline of the American economy and the effect these have had on American power, it does put Layne’s claim into question as to whether a risen China will spell the end.

Addressing the implications of how this would affect power politics in the region, it is evident that China’s rise has already begun to reshape the regional order. There are indications that this is occurring, such as how countries such as Japan and Australia have begun to question their political stance on Beijing due to their increasing economic dependence on China. Furthermore, Chinese led institutions have begun to shadow American led institutions and are possibly preparing to expel American influence out of the region in the future resulting in China becoming the regional hegemon.

There exist certain limitations within these predictions. Of course, at present China is positioning itself to surpass and replace the United States, the ongoing West to East transition will facilitate this. However, it is difficult to fully predict whether China will successfully replace the United States as its rise is under threat from its growing debt problem because of the fragility of its property bubble. Furthermore, Washington may in the future devise an effective strategy in containing Chinese expansion which may lead to a Sino-American conflict. Henceforth, it hangs in the balance as to whether China will continue to pursue an end to the Pax Americana and conversely how the US will react to combat its decline and decelerate Chinese expansion.

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