US-led Free Market Economy and the Rise of China
A Hegemonic power shift?
To what extent did the US-led neoliberal world principle of free trade since 1990s has
resulted in positive effects on Chinese economy?
Student: Wahhab Hassoo
Lecturer: Dr. Prof. Oscar Widerberg
Student number: 2668181
Subject: Final Paper (Network Analysis)
Date: May the 15th, 2023
Words: 3256
1
,Introduction
The (neo)liberal international order (LIO) was pioneered by the United States after the Cold
War. A set of universal, Wester rules-based, and peacefully structured relationships serve as
the cornerstone of this US-led liberal world, also known as the liberal international order
(Sharma, 2020, pp. 2-3). The idea of the LIO is based on norms and values such as laissez-
faire, free market economy, globalization of trade, political rights, democracy, and state
sovereignty equality, social egalitarians, a dislike of tyranny, as well as the dissemination of
democratic values around the world (Carvin, 2022, p. 4). The LIO is described as an "open-
door grand strategy" meant to promote the liberal expansionism that has persisted throughout
the post-cold war era by breaking down trade and investment barriers and opening-up borders
and markets globally (De Graaff & Van Apledoorn, 2021, p. 3).
However, emergence of multiple crises such as global financial crisis, Donald Trump
becoming the 45th president of the US and COVID-19, resulting into positive economic gains
for China, has raised questions about the continuation of the US-led LIO, that has dominated
the globe since the collapse of the Soviet Union end of the 20th century. According to Van
Apeldoorn and De Graaff (2022) ‘’Ironically one had to wait for a billionaire real estate
mogul winning the White House, to make for a real, if still only partial, break with
neoliberalism’’. Filling this gap, the rise of China poses a serious challenge to the US position
within the LIO, as China fully benefited from this LIO’s principle of free market economy
whereby any state is allowed to enter and to compete for economic gains. China positions
itself more and more as a proponent of open trade and the LIO (De Graaff et al, 2020, p. 3).
Trump's claimed support for a "America first" policy, which is evident both in rhetoric and
actual actions like the withdrawal from the Trans-Pacific Partnership free trade agreement, the
Paris climate change agreement, and the trade war with China, seems to imply a radical break
with the LIO that has dominated the American foreign policy since at least the Cold War.
Therefore, it is essential to consider Chinese rise and Xi's "Chinese Dream" and the
goal of making China an innovative powerhouse with a strong global presence seriously (De
Graaff et al, 2020, p. 3). Indeed, competition within a mutually agreed-upon international
order since the Col-War is only to be welcomed in the eyes of American trade hawks if the
rivals are willing to adhere to American economic and geopolitical norms (Tooze, 2019, p. 8).
For instance, After the Second World War, Europe was forced to learn this lesson. Japan
learned this lesson the hard way in the 1980s and the beginning of the 1990s. If China doesn't
take that lesson to heart, it needs to be restrained (Tooze. 2019, p. 8).
2
, Existing literature compromises and raises concerns about the decline of a US-led
unipolar LIO that has dominated the world since the end of the Cold War end of and the
dissolution of the Soviet Union the 20th century. This LIO has been weakened by numerous
crises, such as Trump's inauguration as the 45th president of the US, and the COVID-19
pandemic in 2020, and the US fear for rise of China. In the case of the US for instance and in
accordance with Tooze (2019), Trump pursuit of ‘American first’ has weakened the American
decades-built alliances and left the LIO at a moment when the US is threatened by new great
powers such as China. The rise of China, which is considered as the biggest challenge to the
current global hegemon, primarily the Western US-led LIO, can therefore not be neglected.
More specifically, an answer to the following research question will be given:
To what extent did the US-led neoliberal world principle of free trade policies since 1990s
has resulted in positive effects on Chinese economy?
Through a network analysis that rests on terms such as degree of centrality, this study focuses
on the rise of China in economic terms. By comparing the Chinese export and imports
between 1992 and 2020 to that of the greatest economic powers in the late 20th century,
mainly Japan, Germany, the US, the UK, and France, a network analysis is conducted in this
study. This will show how the LIO’s principles of free trade and globalization of industries
have paved the way for Chinese economy growth.
3
A Hegemonic power shift?
To what extent did the US-led neoliberal world principle of free trade since 1990s has
resulted in positive effects on Chinese economy?
Student: Wahhab Hassoo
Lecturer: Dr. Prof. Oscar Widerberg
Student number: 2668181
Subject: Final Paper (Network Analysis)
Date: May the 15th, 2023
Words: 3256
1
,Introduction
The (neo)liberal international order (LIO) was pioneered by the United States after the Cold
War. A set of universal, Wester rules-based, and peacefully structured relationships serve as
the cornerstone of this US-led liberal world, also known as the liberal international order
(Sharma, 2020, pp. 2-3). The idea of the LIO is based on norms and values such as laissez-
faire, free market economy, globalization of trade, political rights, democracy, and state
sovereignty equality, social egalitarians, a dislike of tyranny, as well as the dissemination of
democratic values around the world (Carvin, 2022, p. 4). The LIO is described as an "open-
door grand strategy" meant to promote the liberal expansionism that has persisted throughout
the post-cold war era by breaking down trade and investment barriers and opening-up borders
and markets globally (De Graaff & Van Apledoorn, 2021, p. 3).
However, emergence of multiple crises such as global financial crisis, Donald Trump
becoming the 45th president of the US and COVID-19, resulting into positive economic gains
for China, has raised questions about the continuation of the US-led LIO, that has dominated
the globe since the collapse of the Soviet Union end of the 20th century. According to Van
Apeldoorn and De Graaff (2022) ‘’Ironically one had to wait for a billionaire real estate
mogul winning the White House, to make for a real, if still only partial, break with
neoliberalism’’. Filling this gap, the rise of China poses a serious challenge to the US position
within the LIO, as China fully benefited from this LIO’s principle of free market economy
whereby any state is allowed to enter and to compete for economic gains. China positions
itself more and more as a proponent of open trade and the LIO (De Graaff et al, 2020, p. 3).
Trump's claimed support for a "America first" policy, which is evident both in rhetoric and
actual actions like the withdrawal from the Trans-Pacific Partnership free trade agreement, the
Paris climate change agreement, and the trade war with China, seems to imply a radical break
with the LIO that has dominated the American foreign policy since at least the Cold War.
Therefore, it is essential to consider Chinese rise and Xi's "Chinese Dream" and the
goal of making China an innovative powerhouse with a strong global presence seriously (De
Graaff et al, 2020, p. 3). Indeed, competition within a mutually agreed-upon international
order since the Col-War is only to be welcomed in the eyes of American trade hawks if the
rivals are willing to adhere to American economic and geopolitical norms (Tooze, 2019, p. 8).
For instance, After the Second World War, Europe was forced to learn this lesson. Japan
learned this lesson the hard way in the 1980s and the beginning of the 1990s. If China doesn't
take that lesson to heart, it needs to be restrained (Tooze. 2019, p. 8).
2
, Existing literature compromises and raises concerns about the decline of a US-led
unipolar LIO that has dominated the world since the end of the Cold War end of and the
dissolution of the Soviet Union the 20th century. This LIO has been weakened by numerous
crises, such as Trump's inauguration as the 45th president of the US, and the COVID-19
pandemic in 2020, and the US fear for rise of China. In the case of the US for instance and in
accordance with Tooze (2019), Trump pursuit of ‘American first’ has weakened the American
decades-built alliances and left the LIO at a moment when the US is threatened by new great
powers such as China. The rise of China, which is considered as the biggest challenge to the
current global hegemon, primarily the Western US-led LIO, can therefore not be neglected.
More specifically, an answer to the following research question will be given:
To what extent did the US-led neoliberal world principle of free trade policies since 1990s
has resulted in positive effects on Chinese economy?
Through a network analysis that rests on terms such as degree of centrality, this study focuses
on the rise of China in economic terms. By comparing the Chinese export and imports
between 1992 and 2020 to that of the greatest economic powers in the late 20th century,
mainly Japan, Germany, the US, the UK, and France, a network analysis is conducted in this
study. This will show how the LIO’s principles of free trade and globalization of industries
have paved the way for Chinese economy growth.
3
