Book Launch: China and the Global Economic Order

By Kevin P. Gallagher and Gregory T. Chin

More than any time since their founding in 1944, the International Monetary Fund (IMF) and the World Bank, known as the Bretton Woods Institutions (BWIs), are undergoing important changes. China has played a significant role in driving those changes such that a new global economic order may be emerging.

In their new book China and the Global Economic Order, Gregory T. Chin and Kevin P. Gallagher explore how China is playing a pivotal role in transforming the BWIs and creating a new global economic order. Published by Cambridge University Press in its Global China series, the book traces the evolution of China’s engagement within the BWIs from 1980, when China re-entered, through 2025.

Using a combination of new qualitative findings and quantitative datasets, Chin and Gallagher demonstrate that China has adopted an evolving approach toward the BWIs, initially acting as a ‘rule-taker’ during its first two decades as a member, later emerging as a ‘rule-shaker’ within these institutions, and ultimately becoming a new ‘rule-maker’ outside of the BWIs.

As a ‘rule-taker,’ China adopted financial and accounting standards, as well as economic and fiscal policies through its engagement with the IMF. During the earlier stages of China’s economic take-off, it also benefited significantly from its project loans and policy advice from the World Bank.

Chin and Gallagher reveal that China’s interventions as a ‘rule-shaker’ within the BWIs, especially since the late 1990s, have led to important policy changes in the BWIs on capital account liberalization, exchange rates, industrial strategy and the reduction in controversial conditionalities.

As a new ‘rule-maker’ operating outside of the BWIs, China has established its own globally oriented national institutions, including the China Development Bank (CDB) and the Export-Import Bank of China (CHEXIM). Additionally, it has co-created new multilateral institutions such as the Asian Infrastructure Investment Bank (AIIB), the BRICS-led New Development Bank (NDB) and Contingent Reserve Arrangement (CRA) and the ASEAN Plus Three Chiang Mai Initiative Multilateralization (CMIM).

To explain the dynamics underlying these changes, the authors delve into the concept of ‘two-way countervailing power.’ With one foot outside the BWIs, China has built a range of new institutions that provide similar services but operate under different governance. Inside the BWIs, China has collaborated with coalitions across the Global South to advocate for institutional reforms. China’s pursuit of countervailing power in both directions has contributed to reforms within the BWIs and, more broadly, to the gradual transformation of the global order.  However, it has also provoked counter-reactions, particularly from the United States and its Western allies.

To download a complimentary copy of the book or order a hard copy, click here.