## Leading the Way

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**Canonical URL:** [Leading the Way](https://www.imf.org/-/media/files/publications/fandd/article/2022/september/book-review-arora.pdf)

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### Central thesis and framing
- China’s dramatic growth and implications for the world economy have generated extensive literature; C. Fred Bergsten’s book focuses on what China’s growing role means for US leadership in the post–World War II global economic order.
- The post–World War II global economic order’s pillars, as described in the review, are cooperative international institutions (including the IMF), avoidance of beggar-thy-neighbor policies, and reliance on markets and the rule of law.
- Bergsten’s core argument: the United States inevitably will have to share global economic leadership with China rather than “contain” it or persuade China to adopt Western views.

### Proposed approach: “conditional competitive collaboration”
- Term: “conditional competitive collaboration.”
- Key features:
  - Collaborative US–China leadership on key global economic issues, conditional on each country’s fulfilling its obligations in the international economic system.
  - Close consultation on systemic matters involving global public goods (such as climate change).
  - Flexibility about the balance of leadership on specific issues (example: China having greater sway on development finance; the United States on international financial and monetary issues).
  - Differentiation between global and regional arenas.

### Institutional and multilateral recommendations
- Multilateral cooperation:
  - The United States should seek to uphold, with other major countries, the collaborative international economic system.
  - Economic leadership should be decoupled from issues such as national security and values.
  - Traditional alliances should be restored to strengthen international consensus on key global matters.
  - A multilateral trade reform package should be completed with China involved in writing the rules.
- International financial institutions and the IMF:
  - Bergsten envisions eventual broad equivalence between China and the United States at the IMF, including on quotas and voting parity, with countries accepting related obligations and requirements.
  - He discusses IMF-related questions including location, governance, and the role of the IMF’s Special Drawing Rights (SDRs) in global finance.
- Institutional integration and engagement:
  - Supports US integration into China-led institutions (such as the Asian Infrastructure Investment Bank) and vice versa.
  - Advocates a complementary rather than confrontational approach to projects such as the Belt and Road Initiative.

### Domestic policy prescriptions
- Calls for domestic reforms to underpin the outward orientation of US economic policy and its global economic role.
- Specific domestic measures cited:
  - Stronger social safety nets.
  - Mechanisms to address the inequalities associated with globalization, which provides large aggregate gains but distributes them unequally.

### Assessment and caveats from the reviewer
- Strengths:
  - Important for breadth of perspective and depth of knowledge.
  - Most insightful on international economic issues relevant to Finance & Development readers.
- Caveat:
  - Issues are seen from an essentially US perspective; the landscape may look different from China, Europe, Japan, or elsewhere.
- The reviewer notes additional relevant literature by other authors, including Yukio Hatoyama, Robert Kagan, and Yan Xuetong, and regards Bergsten’s book as a good addition.

### Publication details
- Reviewer: VIVEK ARORA, deputy director, IMF African Department, and former IMF senior resident representative in China.
- Book: C. Fred Bergsten, The United States vs. China: The Quest for Global Economic Leadership.
- Publisher/location/year/length/price: Polity Press; Cambridge, UK, and Medford, MA, 2021; 362 pp., $29.95.

*Source: book review by Vivek Arora in Finance & Development (September 2022).*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2022/september/book-review-arora.pdf_