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New world order without a hegemon: compete and co-operate

By Dilip Hiro - posted Monday, 8 March 2010

While there is a broad consensus about relative decline of the United States as a superpower, political commentators have debated about emerging political rivalries. A study of recent events, however, shows that instead of a straightforward bipolar or multipolar relationship, simultaneous co-operation and competition will be the likely template of relationships among the major powers - United States, China, the European Union, Russia, India and Brazil. The new pattern of fluid and ever-changing relationships between such powers will underscore the end of the uncontested global supremacy in economics, politics, military and culture that the United States has enjoyed since 1991.

Attempts by each of the players to obtain the best economic and political advantage for themselves while co-operating on issues of common concern is likely to produce tension as well as unexpected accommodation and temporary alliances. The sharpest example of engagement and containment is the relationship between Beijing and Washington.

On one hand, the People’s Republic of China (PRC) has been buying US Treasury bonds to assure the stability of the US market for its export and acquiring US assets with its trade surplus. On the other it has been developing area-denial weapons and anti-satellite and cyber warfare capabilities to be used against the US in case of a conflict over Taiwan.


Since the Chinese yuan is pegged to the US dollar, it is in the mutual interest of China and America to ensure that the greenback’s exchange rate with respect to other major currencies does not deteriorate too much. That forecloses Beijing’s option of unloading its massive US dollar reserves in large tranches. So it is almost mandatory that the world’s largest economies co-operate.

By contrast, in Taiwan the interests of the two nations clash. The PRC regards Taiwan as a breakaway province and is resolutely committed to recovering it. Since 2001, it has held combined military exercises twice a year aimed at capturing Taiwan. It has put in place a co-ordinated network of short and medium-range ballistic missiles, mobile and stationary, to overpower Taiwan’s air defenses and missiles network.

On the other side, America has continued to sell advanced weapons to Taiwan in accordance with the Taiwan Relations Act of 1979; and senior PACOM (Pacific Command) officers have started observing Taiwan’s annual Han Kuang armed forces exercises to judge the island’s military preparedness. Recently, the Obama administration announced the sale of $6.4 billion worth of advanced weaponry to Taiwan, including anti-missile missiles. In return, Beijing threatened sanctions against the American companies involved in supplying these weapons. Its military claimed its first success in downing a missile in mid-flight as part of its anti-missile defense.

Similarly, competition and co-operation marks relations between the PRC and Russia since 1996 when they co-sponsored the formation of the five-member Shanghai Forum. Originally begun with the modest aim of China delineating disputed boundaries with the successor states of the Soviet Union, the Forum was later expanded to six members, renamed the Shanghai Cooperation Organization (SCO), and moved to Beijing. Since then the bonds between Beijing and Moscow have strengthened, with the two nations holding joint military exercises in China’s Shandong Peninsula in August 2005. Although Russia has clamped down on ethnic Chinese migrants and traders, this has not affected the Chinese acquisition of sophisticated Russian weapons like the Russian Kilo Class submarine equipped with anti-ship SS-N-22 cruise missiles designed to counter the US navy.

China’s economic interest too called for close ties with Russia which has emerged as the largest exporter not only of natural gas, but also of oil, the commodities key to China’s industrial progress. Last year, reeling from the double whammy of low energy prices and the global credit squeeze, Russia's leading oil company and pipeline operator agreed to provide 300,000 barrels per day (bpd) in additional oil to China over 25 years for a $25 billion loan from the state-controlled China Development Bank.

But such co-operation does not preclude differences in the foreign policy of the two neighbours. Iran is a case in point. Yielding to Washington’s relentless pressure, Russian president Dmitry Medvedev said at a press conference at the United Nations in September 2009 that “Sanctions rarely lead to productive results, but in some cases sanctions are inevitable”. In contrast, China continues to express its opposition to economic sanctions against Tehran. The two countries also differed on Moscow’s tough approach on Georgia. Repeating China’s long-standing tenet of respecting the territorial integrity of the UN member-states, China refused to support the Kremlin’s recognition of South Ossetia and Abkhazia as independent states.


Another example of a mixed relationship comes from China’s relations with its Asian rival India. Although the PRC has settled its land border disputes with all other neighbours it has refused to do so with India. But that did not stop China from becoming India’s number one trading partner in 2008.

While noting with some trepidation that New Delhi was busily upgrading its military facilities on the Andaman and Nicobar Islands to the north of the strategic Malacca Strait, Beijing has held joint military exercises with India in the region.

Although India has signed a favourable civil nuclear agreement with the US and expanded its military co-operation and commercial ties with Washington, this has not prevented Indian prime minister Manmohan Singh from signing up $10 billion worth arms deal with the Kremlin during his recent visit to Moscow.

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Reprinted with permission from YaleGlobal Online ( Copyright © 2010, Yale Center for the Study of Globalization, Yale University.

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About the Author

Dilip Hiro is the author of The Iranian Labyrinth and Secrets and Lies: Operation ‘Iraqi Freedom’ and After and, most recently, Blood of the Earth: The Battle for the World's Vanishing Oil Resources, published by Nation Books.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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