Leading the Way
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- Leading the Way
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Bibliographic details
- Authors: VIVEK ARORA
- Published: July 12, 2022
Overview
- Book reviewed: The United States vs. China: The Quest for Global Economic Leadership by C. Fred Bergsten.
- Publication details as given: Polity Press, Cambridge, UK, and Medford, MA 2021, 362 pp., $29.95.
- Review author: VIVEK ARORA, deputy director in the IMF’s Middle East and Central Asia Department.
- Review published in F&D Magazine, September 2022.
Central thesis and framing
- Bergsten’s central argument: the United States inevitably will have to share global economic leadership with China.
- He rejects strategies premised on “containing” China or persuading China to adopt Western views as fanciful.
- Key proposed approach: “conditional competitive collaboration” — collaborative US-China leadership on key global economic issues, conditional on each country’s fulfilling its obligations in the international economic system.
- Emphasis on differentiating between global and regional arenas and being flexible about the balance of leadership on specific issues.
Proposed contours of US–China cooperation
- Collaborative consultation on systemic matters involving global public goods (example given: climate change).
- Flexibility in leadership balance:
- China may have greater sway on development finance.
- The United States may have greater sway on international financial and monetary issues.
- Multilateral trade reform package should be completed with China involved in writing the rules.
- 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.
Recommendations regarding international financial institutions and cooperation
- 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.
- Discusses questions for the Fund including:
- Its location.
- Its governance.
- The role of the IMF’s Special Drawing Rights (SDRs) in global finance.
- Supports mutual integration into each other’s institutions (example: US integration into China-led institutions such as the Asian Infrastructure Investment Bank) and a complementary rather than confrontational approach to initiatives such as the Belt and Road Initiative.
Domestic policy prescriptions
- Calls for domestic reforms in the United States to underpin the outward orientation of US economic policy and its global economic role.
- Specific domestic priorities highlighted:
- 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
- The book is noted for breadth of perspective and depth of knowledge, especially on international economic issues.
- Caveat: the issues are seen from an essentially US perspective; the landscape may look different from perspectives in China, Europe, Japan, or elsewhere.
- The reviewer notes there is a broader literature from around the world (examples named in the review: Yukio Hatoyama, Robert Kagan, Yan Xuetong) that offers additional viewpoints.
Source: F&D Magazine book review by VIVEK ARORA, September 2022 — review of C. Fred Bergsten, The United States vs. China: The Quest for Global Economic Leadership.
Content in this bundle
- Leading the Way