Articles and Posts from ISQ


“No Reservations” makes important contributions to our understanding of emerging international monetary politics and the debate over China’s rise and the sustainability of the liberal economic order. The study provides more evidence of a shifting IPE landscape in the wake of the great financial crisis. In this, it joins the authors’ (2014) work on China’s signing of a network of bilateral swap agreements (BSAs) with foreign central banks and Erica Downs’s (2011) survey of the 2009 loans-for-energy deals concluded between China and six states in Latin America and Eurasia. These highlight how the study of international political economy faces pressing questions about Beijing’s emerging role in global governance. It is thus also intimately linked to debates about whether the BRICS New Development Bank and Asian Infrastructure Investment Bank pose a challenge to the Western-led counterparts such as the IMF and World Bank.

A major strength of the article is its clear exposition of the underlying geopolitical logic involved in reserve currency adoption, not least because it addresses critical issues about the relationship between public-goods provision and hegemonic status, and the processes that might undermine the liberal hegemonic order (Barma, Ratner and Weber 2007; Barma et. al. 2009; and Ikenberry 2008). Still, I have some concerns.

Liao and McDowell argue, "Other states in the international system vary in their preferences concerning contemporary international order. While some support the liberal, American-led status quo, others prefer the emerging Chinese alternative.” This is an unnecessarily stark way to think about the issue. Certainly, China has developed its own array of mechanisms and institutions to conduct foreign economic relations; it consistently expresses differences regarding the West’s norms and values, on issues ranging from human rights to issues of state sovereignty and military intervention. But we are far from a coherent “alternative order.” And we see little indication that even the most dependent Chinese political and economic client states actually identify exclusively with any such Chinese-led world order.  

This shouldn’t be surprising. Why should leaders substitute one order for another? After all, they gain much more from mixing and matching the public goods—currencies, emergency lending, development assistance—on offer from both the West and China?  The availability of alternative patrons, parallel rule sets and non-liberal normative frameworks provides many opportunities to states: they can adapt the current liberal order to domestic needs by pushing back against Western political and economic conditions; extract greater geopolitical concessions from the West by invoking exit options; and to play up, for domestic political purposes, their own independence and autonomy (see Cooley and Nexon 2013; Cooley 2015States may not so much strongly “prefer” a particular liberal American, status quo order or the Chinese alternative, but rather act as opportunistic forum shoppers—tactically shifting their preferences among patrons in order to extract more pledges and benefits.

Briefly consider some of the clusters of cases in the dataset themselves. The early adoption of RMB by Western countries like Norway, France, UK, Lithuania, Austria, Switzerland hardly indicates their embrace of a Chinese-led alternative international order. In fact, Norway has been involved in politically damaging political disputes with China over sensitive issues like Tibet and the awarding of the Nobel Peace Prize to the human rights dissident Liu Xiaobo. Yet it was the first adopter of RMB and joined the AIIB . Similarly, Japan, Korea, the Philippines and Australia all acknowledge the critical nature of their relationships with China. They each see the need to manage it with great care and sensitivity. At the same time, though, they are strengthening their alliance and security ties to the United States. Perhaps what we can say with greater certainty is that these countries usually prefer to avoid being placed in situations where they publicly have to choose between the West and China. This was precisely why Washington’s ultimately unsuccessful public lobbying of its allies not to join the AIIB proved so politically awkward and damaging for it.

It seems to me that RMB adoption, as I interpret Liao and McDowell’s findings, follows a similar pattern of geopolitical hedging, not choosing. Space does not permit a full investigation of some of these other cases, but even countries that have the unquestionably close economic relationship with Beijing—such as Pakistan, Argentina, Angola, Kenya, Venezuela—and receive significant Chinese loans and assistance is more about regime survival and international autonomy than acquiescence to Beijing. Tellingly, even President Putin of Russia—perhaps the most openly counterhegemonic of world leaders—openly embraces increased cooperation with China as a calculated geoeconomic shift away from the West, not as a move to lock Moscow into Beijing’s regional order (Cooley 2012).

Moreover, these developments highlight the extent to which Beijing’s authority as a global economic governor is still quite fragile, not strong.  To follow Avant, Finnemore and Sell (2010), China certainly demonstrates “efficacious authority” and competence on economic issues and as a public goods provider (RMB, developmental assistance, investment), but I would argue it still lacks the principled, institutional and delegated types of authority that more broadly have characterized liberal world order. 

In sum, the RMB internationalization trends that the authors invaluably identify are geopolitically important precisely because they play into a much messier, and in my view opportunistic, use of emerging donors and institutions by states in the post-Western landscape. Why join Team USA or Team China, when you can now reap the benefits of selective engagement with both?


Avant, Deborah D., Martha Finnemore, and Susan K. Sell, eds. 2010. Who governs the globe?. New York: Cambridge University Press.

Barma, Naazneen, et al. 2009. "A world without the West? Empirical patterns and theoretical implications." The Chinese Journal of International Politics 2.4 (2009): 525-544.

Barma, Naazneen, Ely Ratner, and Steven Weber. 2007. "A World without the West." The National Interest No. 90 (July/August): 23-30.

Cooley, Alexander. 2012. Great games Local Rules: the New Great Power Contest for Central Asia. New York: Oxford University Press.

Cooley, Alexander. 2015. "Countering Democratic Norms." Journal of Democracy 26.3 (2015): 49-63.

Cooley, Alexander, and Daniel H. Nexon. 2013. "“The Empire Will Compensate You”: The Structural Dynamics of the US Overseas Basing Network." Perspectives on Politics 11.4 (2013): 1034-1050.

Downs, Erica Strecker. 2011. Inside China, Inc: China's Development Bank's Cross-border Energy Deals. John L. Thornton China Center at Brookings, 2011.

Ikenberry, G. John. 2008. "The Rise of China and the Future of the West." Foreign Affairs 87.1 (2008): 23.

Liao, Steven, and Daniel McDowell. 2014. "Redback Rising: China's Bilateral Swap Agreements and Renminbi Internationalization." International Studies Quarterly (2014).

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