On December 6, LeidenAsiaCentre researchers Jue Wang and Michael Sampson published a new report as part of a collaboration between Chatham House and the LAC, titled “China’s approach to global economic governance – From the WTO to the AIIB.” Below, you can read the summary of the report. To access the report, click the red button at the top of this page.
- Over the past 20 years, China’s trade and development finance objectives and Western concerns about these have remained relatively consistent. China has adopted a multifaceted approach to global economic governance that combines both bilateral and multilateral tools as well as a mix of cooperative and confrontational tactics.
- Domestic needs, strategic concerns and the country’s development experience all drive this approach. For the foreseeable future, China will continue to combine cooperative multilateral engagement with ‘outside options’ – in the form of bilateral or regional cooperation – to stimulate internal reforms in existing global institutions, such as the World Bank.
- When multilateral institutions have impeded China’s pursuit of its trade objectives, the country has instead taken an alternative approach, such as through regional trade agreements. However, this route has only been successful with buy-in from major partners.
- In development finance, China pursues both bilateral and multilateral approaches. Bilateral lending allows Beijing to mitigate overcapacity in industries, facilitate Chinese enterprises’ global expansion, stimulate trade with recipient countries, and increase influence in the developing world. Meanwhile, engagement with the World Bank and the Asian Development Bank (ADB), as well as new co-established financial institutions, like the Asian Infrastructure Investment Bank (AIIB), helps China to gain influence in setting rules and norms.