Erosion of the Dollar-Centric World Financial Regime: China's Normative Strategy and Contested Multilateralism

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Abstract

The erosion of the dollar-centric global financial order is creating opportunities for China to enhance its role in global financial governance. The United States remains the system's most influential actor, underpinned by its leadership in Bretton Woods institutions and the dollar's dominance in international reserves and settlements. Acknowledging the power disparity with the U.S., China has adopted a non-confrontational strategy to reform the international financial architecture. This strategy is normative, advancing China's principles, rules, and standards both by reforming traditional institutions and establishing parallel ones. China positions its approach, which emphasizes sovereign equality and international development, as a moral contrast to the Western liberal regime. These ideas resonate with developing nations seeking more equitable participation in global financial governance. The author concludes that the current system is characterized by "contested multilateralism," wherein China challenges U.S. leadership from within, employing a multi-pronged strategy to reshape the global financial governance regime. At the same time, the situation is complicated by the presence of the European financial pole, which, although it does not pretend to dominate the system, acts as an important system-forming actor, simultaneously becoming a space for American-Chinese competition.

About the authors

M. S Ramich

Peoples' Friendship University of Russia named after Patrice Lumumba

Email: ramich_ms@mail.ru
ORCID iD: 0000-0003-1479-2785
Ph.D. (Political Science), Assistant Professor, Department of Theory and History of International Relations Moscow, Russia

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