China's institutional statecraft within the liberal international order: the Asian Infrastructure Investment Bank

• Author: Jonathan Pass
• Position: Profesor Asociado de Derecho internacional y Relaciones internacionales de la Universidad Pablo de Olavide (jonapass@upo.es). Es autor del libro recién publicado American Hegemony in the 21st Century: A Neo Neo-Gramscian Perspective, New York, Routledge, 2019.
• Pages: 89-115

REDI, vol. 72 (2020), 2

CHINA’S INSTITUTIONAL STATECRAFT WITHIN

THE LIBERAL INTERNATIONAL ORDER: THE ASIAN

INFRASTRUCTURE INVESTMENT BANK

Jonathan PASS*

SUMMARY: 1. INTRODUCTION.—2. CHINA’S INSTITUTIONAL STATECRAFT.—3. THE AIIB

«CHALLENGE»: A MAINSTREAM EXPLANATION.—4. INSTITUTION-BUILDING: A

NEO NEO-GRAMSCIAN PERSPECTIVE.—5. UNDERSTANDING CHINA’S AIIB BALANC-

ING ACT.—6. CONCLUSION.

1. INTRODUCTION

1. An area of major interest for contemporary international relations

(IR) scholars is the effect the emergence of the China has had on the United

States (US)-led liberal international order (LIO), understood here as encom-

passing the principles, rules, norms, practises, and institutions underpinning

global free trade, international law, multilateralism, democracy, and respect

for human rights.

2. Within mainstream IR, those academics working in the neorealist tradi-

tion consider international organisations (IOs) as conduits for states to maxi-

mise their power and/or security. While variations exist 1, at least for those

neorealists ascribing to the zero-sum, inter-state rivalry paradigm, the incum-

bent world hegemon (US) would be well advised to dilute, contain, and if pos-

sible, quell, any new initiative threatening to upset the institutional balance

of power, especially one promoted by a «revisionist» challenger (China) 2. For

* Profesor Asociado de Derecho internacional y Relaciones internacionales de la Universidad Pa-

blo de Olavide (jonapass@upo.es). Es autor del libro recién publicado American Hegemony in the 21st

Century: A Neo Neo-Gramscian Perspective, New York, Routledge, 2019.

Todas las páginas webs de referencia han sido consultadas por última vez el 29 de abril de 2020.

1 See for example SCHWELLER, R., «Opposition but Compatible Nationalisms: A Neoclassical Real-

ist Approach to the Future of US-China Relations», The Chinese Journal of International Politics, vol. 11,

Spring, 2018, n.º 1, pp. 23-48.

2 See for example CHRISTENSEN, T. J., «Fostering Stability or Creating a Monster? The Rise of China

and U.S. Policy towards East Asia», International Security, vol. 31, 2006, n.º 1, pp. 81-126; FRIEDBERG,

Revista Española de Derecho Internacional

Sección ESTUDIOS

Miscelánea/Miscellany

Vol. 72/2, julio-diciembre 2020, Madrid, pp. 89-115

http://dx.doi.org/10.17103/redi.72.2.2020.1a.03

© 2020 Asociación de Profesores

de Derecho Internacional

y Relaciones Internacionales

ISSN: 0034-9380; E-ISSN: 2387-1253

Recepción: 06/03/2020. Aceptación: 30/04/2020

90 JONATHAN PASS

REDI, vol. 72 (2020), 2

most American neorealists it is vital to preserve the LIO, the fulcrum of the

US-centred world order which serves to reproduce the hegemon’s geopolitical

dominance.

3. Neorealism’s «counterpart» within the mainstream, the neoliberal in-

stitutionalists —shortened here to neoliberals— 3 also favour the preservation

of the LIO, and are concerned about how the rise of the People’s Republic of

China (PRC) might affect global institutions and regimes, but eschew zero-

sum game logic. Instead, inf‌luenced by functionalism, they consider institu-

tion and regime building as arising out of the need for improved inter-state

cooperation: the sure way to maximise absolute gains, in a complex global-

ized world 4. In contrast to other liberals, such as Kantian-inspired demo-

cratic peace theorists 5, neoliberals largely remain optimistic that Chinese

institutional initiatives can remain within the broad framework of the LIO 6,

and that the Asian power be converted into what former US Deputy Secretary

of State and World Bank President, Robert Zoellick, called a «responsible

stakeholder» in the international system 7.

4. Yet such a binary in/out, cooperation/antagonism debate fails to cap-

ture the nuanced nature of Beijing’s institutional statecraft within the con-

temporary LIO. Taking G. John Ikenberry and Darren J. Lim’s strategic clas-

sif‌ication as a template, the article argues that Beijing has always adopted

a pragmatic approach on multilateralism, picking and choosing the institu-

tions and regimes it wishes to be bound by, much like the US itself 8.

5. The Asian Infrastructure Investment Bank (AIIB) constitutes an exam-

ple of «external innovation», according to Ikenberry and Lim’s categorisation.

Launched in June 2015 (in operation 2016) with a starting capital of $100 bil-

lion, the mission of this multilateral development banks (MBD) is to improve

economic and social outcomes in Asia by investing in sustainable infrastruc-

ture and other productive sectors. Although based in Beijing, at the time of

A. L., A Contest for Supremacy: China, America, and the Struggle for Mastery in Asia, New York, W. W.,

Norton, 2011, and FELS, E., Shifting Power in Asia-Pacif‌ic? The Rise of China, Sino-US Competition and

Regional Middle Power Allegiance, Switzerland, Springer, 2017.

3 Not to be confused with its common economic usage, referring for those adherents of laissez-

faire, free market capitalism, although some neoliberal institutionalists may well favour such a doc-

trine.

4 HAAS, P., KEOHANE, R. and LEVY, M. (eds.), Institutions for the Earth, Cambridge MA, MIP Press,

1993.

5 BROWN, M., LYNN-JONES, S. M. and MILLER, S. E., Debating the Democratic Peace, Cambridge, MIT

Press, 1996.

6 IKENBERRY, G. J., «Illusions of Geopolitics: the Enduring Power of the Liberal Order», Foreign

Affairs, vol. 93, 2014, n.º 3, pp. 80-90.

7 ZOELLICK, R. B., «Whither China: From Membership to Responsibility?», Remarks to the Nation-

al Committee on US-China Relations, 21st September 2005, https://www.ncuscr.org/sites/default/f‌iles/

migration/Zoellick_remarks_notes06_winter_spring.pdf.

8 IKENBERRY, G. J. and LIM, D. J., «China’s Emerging Institutional Statecraft: The Asian Infrastruc-

ture Investment Bank and the Prospects for Counterhegemony», Project on International Order and

Strategy at Brookings, April 2017, pp. i-24, https://www.brookings.edu/wp-content/uploads/2017/04/chi-

nas-emerging-institutional-statecraft.pdf.