China has been unprecedentedly active on the world stage since Xi’s era. It is historically amazing, given that the West had been urging China to become a “responsible stakeholder” not long before. Many people would now suspect: Can China be a hegemon when it leads the world, as the US has been?

There is no doubt about the legitimacy of the concern, if one looks into the international initiatives that China made during the past decade. For example, in some international financial institutions (IFIs) it initiated, such as Asian Infrastructure Investment Bank (AIIB), China holds a veto power. In others it initiated, such as Belt and Road Initiative (BRI) and Multilateral Cooperation Center for Development Finance (MCDF), China is also dominant, and has a de facto veto power.

If a country is to be a hegemon, there are two defining elements. One is that it must be a recognized power; the other is that, by utilizing its power, the country imposes what it alone decides or wishes for upon others, heedless of their feelings or interest.

China is an economic power, surpassing the US as early as 2014, if measured in terms of GDP at purchasing power parity (PPP) rates. China has also quickly become a military power, with its third and most advanced aircraft carrier launched recently. China no longer feels shy to maneuver power and earn a veto position in international cooperation.

Meanwhile, China maneuvers power in a rules-based manner, and with prowess. In the case of AIIB, its veto power is derived from a unique shareholding formula, with GDP as the only variable plus 75% of shareholdings being retained within Asia. The US would be belittled in the non-regional group under the formula, if it became a founding member in 2015.

However, holding a veto power is one thing; to abuse it is another. The case about China is whether it would exercise hegemony, i.e., abusing its veto power to pursue its own interest at the expense of others?

In the short term, the possibility is zero. As a growing power generally, China is still in the phase of establishing itself before the international community. No wonder that it has been taking prudent while meticulous steps to win trust and cooperation from others, including from the established powers. All the while, it is clear that the country is under most strict scrutiny, and even unabated western bias.

In such a highly competitive, contentious, and even hostile environment, China has to behave as a benign and self-restrained power in global economic governance. In other words, there is not even the slightest chance for China to abuse veto power and exercise hegemony, either in the BRI, AIIB or MCDF.  

In the long run, the possibility for China to exercise hegemony is also very low, if not impossible. In its cultural gene, China is not a missionary society; it chooses to influence others more by inducing respect than by conversion. As Confucius said, “If people from the distant quarters still do not submit themselves, you can attract them by endorsing propriety, righteousness, and music.” (“远人不服，则修文德以来之” in Chinese）. Featuring voluntarism, the Chinese culture contrasts a hegemon’s mentality to impose its will and seek predominance over others.

This well explains the reason why China has been advocating, and practicing, the so-called golden rule of “extensive consultation, joint contribution, and shared benefits” in the traditional institutions, as well as in the new ones where it dominates. For example, China demonstrated leadership while exercising self-restraint during a recent WTO negotiation on waiving COVID-19 vaccine patent rights, contributing to its success and the revival of the WTO at large.

In stark contrast, the US never hesitates to abuse veto power in the Bretton Woods institutions, stopping or delaying the much-needed reforms in them. For example, there has been no agreement on a new quota formula in the IMF, after over a decade of fruitless negotiations, while the result of the 2016 Dynamic Formula is yet to be implemented in the World Bank, causing its balance sheet even strained amid global crises.

The US blocks those reforms only to suppress China’s rising influence in them. It also never hesitates to abuse the dollar system to sanction or decouple anybody it dislikes, while chilling others. Regrettably the US hegemony makes those traditional institutions gradually losing relevance and legitimacy, which in turn backfires on American multilateralism.

The US takes even further steps to sabotage Chinese multilateralism, as represented by the BRI and the AIIB. It has sought to stigmatize those institutions with the rhetoric of low standards, and to coerce its allies from joining them.    

Shared values are a prerequisite for a sustainable world order. China aspires to “a world of shared future for mankind”, featuring harmony in diversity across civilizations. To make it happen, China should draw the lesson of the US all the way through. Chinese multilateralism only shines when a veto power does not slip into hegemony.

(by Gu Bin, associate law professor at Beijing Foreign Studies University, and author of Chinese Multilateralism in the AIIB, China Forum Expert)

This op-ed appeared in The Straits Times with the title “China, the US, and what it means to be a hegemon”, July 16, 2022)