China’s growing global clout triggers an economic arms race with the Old World Order

China’s rise is posing a challenge to America’s role as global economic guardian.

The Asian nation’s US$12 trillion economy is the world’s second largest, and biggest once prices are adjusted for purchasing power parity; it’s the largest trading nation; is investing billions in a ‘new Silk Road’; is now No. 3 in terms of voting rights at the IMF and has created its own multilateral development lender - the Asian Infrastructure Investment Bank.

That is a tectonic shift since 2015 - when China’s stewardship of global bodies was confined to the International Network for Bamboo and Rattan - that will shape economic governance for decades to come. The big question: will China bend to the values espoused by existing Western-led liberal democratic institutions or end up remoulding them.

Optimists say China offers a vital source of financing for governments desperate to build infrastructure and grow their economies. They point to Beijing’s embrace of best practices - symbolised by the ‘squeaky clean’ AIIB - and note failures in the Western model that opened the door to China’s expansion in influence.

Take infrastructure investment. Asia alone needs US$26 trillion worth of infrastructure by 2030, according to the Asian Development Bank. That gives China the perfect opportunity to win friends, said Curtis S. Chin, former US ambassador to the ADB under presidents George W. Bush and Barack Obama and inaugural Asia Fellow at the Milken Institute.