The Rise of China and its Impact on International Economic Governance

Abstract

For two decades, China has adroitly used the international economic system to support and further its own ends, without seeking to shape the system. This is now changing, with China arguing against the continued use of the US dollar as the global reserve currency. Yet if China is going to gain the influence it now seeks, it needs to be able to bring Japan, Korea and the region along with it. The obstacle to the development of this unity is security concerns. China needs to return to its traditional use of soft power in the region, and eschew its recent resort to threats backed by hard power to resolve territorial issues, if the region is ever going to be able to speak with a unified voice and thereby shape the global financial system.