China’s rise and the political economy of stability: challenging liberal assumptions in a multipolar era

Abstract

The debates emerging in the global arena regarding the Liberal International Order (LIO) are inextricably linked to the phenomenon of China’s rise. The characteristics of the LIO, which include open markets and economies, institutional U.S. hegemony, and liberal democracy, face several challenges, such as geopolitical competition, a fragmented economy, and normative contestation. This study focuses on a political economy framework to analyze China’s rise and its efforts to reshape the existing liberal order through geo-economic governance, centered capitalism, and institutional layering strategies. These efforts do not aim to overturn the existing, liberal order. This qualitative research project analyzes China’s strategy for reshaping the global order. China’s systemic reconfiguration is analyzed using hegemonic transition theory, comparative political economy, and weaponized interdependence. The study’s findings indicate that China’s rise does not pose a destructive threat to LIO. While China continues to employ state capitalism to advance its economic interests, it does so through an approach distinct from the coercive, hegemonic pattern of the United States, which is more gradual, layered, and selective. This endeavor is best understood as a form of “competitive pluralism,” wherein China constructs alternatives that coexist with the existing liberal order. China’s involvement in multilateral institutions, as well as the establishment of the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative (BRI), are viewed as a form of layered contestation against the institutional hierarchy and liberal norms. This study argues that competitive pluralism has emerged, representing a transformation of multipolar liberal universalism.