Quantifying China’s Rise Within the Bretton Woods System

By Yaechan Lee

China’s emergence as a critical player in the international economic order has considerably shaken up the existing dynamic, leading to its advancement in some respects, but contest in others.

How can researchers measure the extent to which China participates in the three institutional pillars of the Bretton Woods System (BWS) – the International Monetary Fund, the World Bank Group and the World Trade Organization – and the extent to which China operates outside of the BWS, in the realms of international monetary, global developmental finance and world trade, the three main pillars of the international economic order? What are the most credible measurements of China’s footprint in each realm? Numerous datasets have sought to follow the footprints of China’s rise within and beyond the BWS institutions, but due to the sheer size and number of such datasets, it has been difficult to identify where knowledge gaps remain.

A new working paper coauthored with William N. Kring, Gregory T. Chin and Kevin P. Gallagher provides a compact and comprehensive overview of existing datasets that track China’s rise within and beyond the BWS and suggests future pathways for their improvement.

By conducting a comprehensive review of existing datasets, the working paper finds first that the quantitative data on China’s positioning outside of the BWS tends to be highly fragmented and imprecise. This is partially due to the lack of comprehensive and coherent official data published by the Chinese government, leading think tanks and academic institutions to collect unofficial data themselves. The Boston University Global Development Policy Center maintains two such datasets, the China’s Overseas Development Finance Database and the Global Financial Safety Net Tracker.

Secondly, in relation to the first point, we find that there is not yet a comprehensive dataset that brings together the fragmented data and allows users to see the correlations across China’s rising influence in different pillars of the international economic order. This is an important gap, since each pillar is closely correlated. For example, China’s export credits are categorized as development finance, but they also help boost China’s trade. A dataset that allows for a comprehensive overview of China’s rise in these pillars both beyond and within the BWS institutions, will therefore provide a more objective understanding of its rise.

Finally, while tracking China’s rising influence within the BW institutions in quantitative terms (i.e., voting shares or contribution quotas) is rather straightforward, tracking its qualitative influence on these institutions is difficult and unsurprisingly, difficult to assess. However, consider, for example, the rise of China within the WTO, which adopts a “one country, one vote” system. A dataset could be built to conduct text analyses on the regular minutes either officially or unofficially published by respective institutions, and therefore track China’s participation in international forums, and approximate its influence on policy outcomes.

Based on these findings, we propose the following future work agenda. First, we recommend institutions and analysts quantitatively tracking China’s rise in the international economic order build a comprehensive dataset that combines the fragmented datasets that track China’s influence outside the BWS in ways that make China more intuitively comparable to other major economies. Bringing the fragmented datasets together is indeed important, especially as it would allow for a comparative perspective on China’s rise. Building a dataset with comparable definitions to those used by international organizations such as the Organization for Economic Co-operation and Development or the World Bank would allow for such a perspective.

Additionally, we recommend building datasets that track China’s rising qualitative influence within the BW institutions. While this may be a more difficult dataset to collect, new research offers a useful model consisting of text analysis of the reports and minutes published by the IMF to track which country has spoken more in meetings, and whose opinions prevailed more often. This approach may be replicated for other BW institutions to track China’s rising influence.

China’s rise clearly has contributed positively to the global economy. It has quantitatively expanded the volume of global trade and has significantly enhanced the availability of credit for developing economies. It has also been controversial, however, on the grounds that China challenges previously accepted norms and practices in the international economic order. More evaluations will be needed to accurately assess China’s impact, either positively or negatively. This working paper attempts to provide a comprehensive and compact overview of the existing datasets, identifying their gaps and a way forward for research to allow for an objective interpretation of China’s rise when trying to assess its impact.

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Yaechan Lee is an Associate Professor of International Relations at Ritsumeikan Asia Pacific University, Japan and is a former Pre-doctoral Research Fellow with the Global Economic Governance Initiative at the Boston University Global Development Policy Center.

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