Outside In | China’s rise means US needs to come to terms with sharing hegemonic power

First, the good news: China and the United States are unlikely to come to blows over the South China Sea any time soon.

The bad news: the extraordinary 60-year period of peace and development fostered by US hegemonic oversight of the world economy is coming to a close. A “new normal” of “bi-polar” or “multi-polar” rivalry – evident in China’s increasing muscularity in the South China Sea, and its strategic blueprint embedded in the Yi dai, Yi lu (One Belt, One Road) policies – is soon to envelop us, with uncertain consequences.

For someone like myself, born in 1950 when the ink was still drying on the Marshall Plan to reconstruct post-second world war Europe, and on the “Bretton Woods” institutions like the World Bank and the International Monetary Fund, calm and economic progress has been something I have always taken safely for granted. So too has Hong Kong, since the Japanese occupying forces upped anchor, captured huge wealth and advancement over the past 60 years of US hegemonism across the Pacific.

But for both myself, and for Hong Kong, the emerging and rather nervous reality is that the “great moderation” that has prevailed from the early 1950s under the US’s relatively benign hegemonic embrace was maybe not “normal”, but perhaps instead a calm interlude in a normally more conflict-ridden world. The awkward reality may be that Hong Kong’s “golden era” through the 1980s and 1990s is now well and truly behind us. Future progress in a more rivalrous foreign policy environment may be much harder to earn. No wonder our “post-80s” generation is so gloomy. No wonder the “Occupy” movement attracted such emotional support.

In a number of recent strategic and defence-related briefings the messages have been consistent: China has entered a new and more muscular period in which it is likely to assert with increasing force its claim for great power respect. The “accidents of history” that for a century from the mid 1800s delivered repeated humiliations are now well behind it. China is now poised to challenge the US claim to “unipolar” domination.

Don’t get me wrong: I don’t for a minute believe that China’s military is about to go on the rampage – not least in the South China Sea. But China has now begun to say to the world that it has become a globally significant power, and – more important – that it is not necessarily bound by the US-crafted Bretton Woods institutions that have brought peace for the past half century, albeit at the price of adopting a US-crafted legal framework for most of our international institutions.

Nor do I believe that Beijing is about to adopt a “bull-in-a-China-shop” approach to challenging the Bretton Woods architecture that has served so many of us so well. But in the Yi dai, Yi lu framework, China is defining a distinctly China-centred view of the world and its economic priorities. In the Asian Infrastructure Investment Bank (AIIB) it is providing a new perspective on how best to come to the aid of struggling infrastructure-poor economies in Asia and Africa. And in its newly assertive South China Sea positioning, including the impressive cement-pouring activity focused on a number of remote and inconsequential atolls, it is saying that the US Sixth Fleet can no longer regard the South China Sea as its exclusive and unchallenged back yard.