1. Department of Government The Global Financial Crisis, China’s Rise and the West’s Decline: Welcome to the New World Order! Dr. Andrew Cottey Department of Government University College Cork, Ireland

2. Department of Government Introduction President George H. W. Bush, 1990-91 Gulf War: –A ‘new world order’. Noam Chomsky: –‘The 500 Year War’.

3. Department of Government The Global Financial Crisis The end of capitalism? –Capitalism historically rather robust –Absence of viable alternatives. What kind(s) of capitalism? –The end of the neo-liberal ‘Washington consensus’? –The ‘Brussels consensus’? –The ‘Beijing consensus’?

4. Department of Government The Global Financial Crisis Medium and long-term impact? –To date, worst case scenarios have been avoided. –Instability in the financial sector and the liquidity crisis, however, continue. –…

5. Department of Government China’s Rise 1978-2000s average annual economic growth rate approximately 9%. 1990s global impact of China’s rise limited – primarily an exporter. 2000s China ‘goes global’: –Multilateral institutions and political alliances; e.g., WTO, UN Security Council, UN Human Rights Council, Shanghai Cooperation Organization, East Asian Community. –Search for energy and raw materials (Sudan, Africa, Iran, etc). –Aid policy: emergence of China as an aid donor rather than recipient (esp in Africa). –Sovereign wealth funds: China Investment Corporation (CIC) established September 2007 (- US $200bn, est. US $30bn to invest overseas in 2008) –‘Soft power’ strategy: e.g. Confucius Institutes, ‘Beijing consensus’.

6. Department of Government China’s Rise China and the global financial crisis: –‘Bucking the markets’? –Chinese capital as a solution to the global liquidity problem?

7. Department of Government The Rise of the Non-West India, Brazil, Mexico, South Africa, etc high economic growth rates since mid-to-late 1990s: –BRIC (Brazil, Russia, India, China) group likely to become economically larger than G7 (Group of 7). Economic power now being converted into political influence: –E.g., WTO negotiations; UN Human Rights Council; ‘Beijing consensus’; debates on military intervention (Darfur, Zimbabwe, Burma); UNFCCC – Kyoto II a potential ‘train wreck’?

8. Department of Government US Decline? Symptoms of decline: –Budget deficit; 2008 financial crisis; defeat in Iraq and Afghanistan?; military overstretch; global public opinion and decline in ‘soft power’. Relative or absolute decline? –Relative rise of other powers. –Economic assets. –Per centage of GDP devoted to defence sustainable.

9. Department of Government US Decline? Foreign policy challenges for the next US President: –Recognising the limits of American power. –Building coalitions. –Restoring America’s soft power.

10. Department of Government Europe: Resurgence or Decline? European economies show some signs of life. Global financial crisis: –Re-inforces the value of the European model of regulated capitalism. –European states and the EU have responded at least as convincingly as the US to the crisis. Europe continues to struggle with ‘hard power’… …but in an era of multilateral coalition building the ‘European way’ is a significant force –Mark Leonard ‘Why Europe will run the future’.

11. Department of Government The New World Order Central long-term trend = the rise of the non-West. Global financial crisis likely to re-inforce this : –Non-Western economies have weathered the crisis reasonably well – likely to strengthen their relative economic and political power. –Weakened material power and ideological/ normative power of the West. Multipolarity rather than non-polarity.

12. Department of Government The New World Order Global challenges: climate change, managing global capitalism, poverty in Africa, proliferation, terrorism: –Requires building global political coalitions in a post-Western world: –Need to reform global political institutions (UN Security Council, the G7, the IMF, the World Bank).