Published 21 August 2017
It is assumed that China’s Belt and Road Initiative (BRI), and the international developmental financing institutions (IDFIs) recently created in order to support it, are going to challenge the Bretton Woods institutions and, as a consequence, the liberal order, contributing to a global shift in power from the United States to China. The aim of this article is to understand whether this is the case. After introducing the main Chinese financial institutions that are going to support the BRI, the article looks at the key differences between the BRI related IDFIs and the Bretton Woods institutions, focusing in particular on the equality of representation, conditionality and the internationalisation of the renminbi. The paper then looks at how the BRI’s IDFIs fit within the existing international legal order. By comparing the mission and principles of the BRI with those of Bretton Woods, it is argued that the BRI related IDFIs are nested in the current international legal system and that they can contribute to the realisation of some of its objectives. The paper concludes by arguing that, despite the fact that the rise of the BRI’s IFDIs poses new normative questions that in the long run might challenge the Bretton Woods system, the zero-sum game that characterises much of the literature about them and the BRI, hampers our understanding of these institutions. These should, instead, be understood as Bretton Woods’ healthy competitor in a context of increasing multipolarity. There is no Fukuyama ‘end of history’, neither in its original sense, as the liberal order will be increasingly complemented by other centres of power, nor in an opposing sense, as China’s BRI and its related financing institutions are not only nested in the liberal institutional framework, but are also still far from being capable of replacing it.
This paper will be part of the TDM Special Issue on "One Belt One Road (OBOR)". More information here: https://www.transnational-dispute-management.com/news.asp?key=1652