POLS 4701 - Dylan Jenks Political Science Senior Capstone

NORTHEASTERN UNIVERSITY
The Inflation of Powers
Social Globalization and Nation-state Sovereignty
The Greatest Threat to Peace
Dylan M. Jenks
April 20th
, 2016
Political Science Senior Capstone
POLS 4701
Dr. Philip A. D’Agati

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The Inflation of Powers Theory: Social Globalization and Nation-state Sovereignty
Introduction
“As in Alice in Wonderland, it may be necessary to keep running faster in order to stand still.”
– Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political System
The purpose of this paper is to investigate the role of social and economic globalization
on the modern stage of international governance using three cases that involve the relations
between the United States and China. My hypothesis draws on inter-related theories of
globalization, realism and long-term hegemonic stability theory (HST), with my major emphasis
being on the conflicting tendencies in US/China relations between economic globalization and
long-term HST.
The “hole” in the literature on which this paper focuses is the effect of domestic political
pressures on the regimes that are pursuing national self-interests in the international arena. Most
of the literature reviewed assumes as long as the leaders of these regimes have the will to pursue
international confrontations, that they have the flexibility to champion issues of sovereignty
versus international competitors. My hypothesis is that in the modern world, social globalization
has weakened the ability of regimes to control their own populations. Even in heavily controlled
states such as communist China, the population has become increasingly tied into
communications with the outside world and as a result has become more sophisticated in their
economic and political demands. Their power is inflating, diminishing the power of the central
authorities. While China is still a heavily policed centralized regime, it needs to worry about an
increasingly prosperous and educated population seeking regime change should economic
progress be threatened.

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There has been a similar evolution in the United States. For much of the last century
media were centralized, making it relatively simple for the government to try to win the support
of the population for international confrontations through national television, radio and print
media. Today, social media is displacing traditional media and many politicians seem to be at a
loss as to how to lead or control public opinion. They are mystified by the Trump and Sanders
phenomena.
Long cycle HST would postulate that based on current trends United States hegemony is
declining with the increasing globalization of large emerging economies in China, Brazil, India
and perhaps elsewhere, with China appearing set to supplant the United States as the coming
century’s hegemonic power. Under traditional theories, China should be increasingly aggressive
in pursuing issues of territorial sovereignty, but with its quest limited mainly by its concern for
negatively affecting its own economic development. Similarly, the United States should be
working to neutralize China’s international territorial ambitions, but also limited by its concern
for disrupting its now very important trade with China.
My hypothesis predicts that in today’s environment of social globalization, both the
United States and Chinese regimes will eventually reduce their confrontational policies under
pressure from domestic politics. Neither will therefore be the hegemonic power in the future.
They will evolve into more of a shared power system influenced more by domestic politics than
international ambitions. Hegemony becomes less defined by the will of the regimes to lead than
of the will of the people to progress themselves.
The null hypothesis would predict that there will soon be a significant military
confrontation between the United States and China, as there has been multiple times in the past
half century. This null hypothesis assumes that the Chinese and United States regimes have the
flexibility to pursue a confrontational international agenda and that their populations will follow.

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The case studies span the decades from the 1950s through to today. These cases track the
emergence of China from a poor, militarily weak nation to an economic super-power and the
transition of the role of the United States from the clear hegemonic power of the world to a
position where China has today gained equal or greater power by some measures.
In each of the three cases, the Chinese government attempted to exert its sovereignty
through aggressive military actions in territories over which it claims title, assertions that are
disputed by the United States and other nations. In the two cases from the 1950s and 1990s, both
of which involved Taiwan, the United States responded with far superior military force and
China was compelled to back down.
In the contemporary case of recent Chinese territorial aggression in the South China Sea,
the PRC has been taking cautious incremental steps and the United States has so far been
reluctant to confront China militarily. At the regime level the course of events so far, therefore,
is supportive of my hypothesis. Also as predicted in my hypothesis, the Chinese people are
taking a much more assertive role in demanding how their government acts in the current
situation, even taking to the streets to demonstrate. What was not predicted by my hypothesis
has been that the Chinese people have not acted in a way that prioritizes their personal economic
progress. Instead of protesting for peace to preserve trade with other nations, the Chinese people
have turned to intense nationalism and urged their government to be even more territorially
aggressive than it otherwise would have been. The inflation of the power of the people,
therefore, instead of being a force for economic stability and peace has turned out to be one of
the greatest threats to global peace.

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The following six graphs trace the growth of the economies of the United States and China and the expansion of
trade between them. They are referenced in various parts of this paper as to how they reflect the case studies and
applications of theory.

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Theory
My hypothesis recognizes that the economic rise of China to rival the United States
should, according to theories of economic globalization, lead both nations to become
increasingly interdependent on each other’s usage of resources, production and consumption.
Drawing on realism theory, this interdependence should lead each superpower as a matter of
acting in its own interest to seek greater world political stability to foster its own prosperity and
economic/political power both at home and abroad.
In the scope of this paper the focus is on China’s economic relations and military
confrontations with the United States, which has enjoyed an era of relatively unchallenged
dominance in the international theatre for about a century, and China, which in the same time
frame has struggled to build a modern economy over the decades as the Chinese Communist
Party of the People’s Republic of China phased through various periods of reconstruction.
My application of realism theory postulates that in both countries the regimes are under
pressure to maintain peace with each other because they each risk domestic political turmoil
should their citizens’ belief in the regime’s ability to continue long-term economic growth
diminish. The leaders in power, therefore, sense a real threat to their political survival, and in the
case of China perhaps personal survival, should there be deterioration in bi-lateral US/China
political and military relations to the point where it would seriously undermine their bi-lateral
economic and trade relations.
However, the rise of Chinese global economic power, which has already matched the
United States by some measures, and China’s increasing military power in the Asian Pacific
region implies a period in which the United States will no longer be the only dominant

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hegemonic power. The stability that comes with a global hegemonic leader that is willing and
able to lead the world should diminish with the increase in globalization, which would mean less
stability and therefore in my definition less peace.
In the case of China, this disruption of the United States hegemonic era of global stability
confronts the Chinese regime with a conflict between its interest in exerting its sovereignty and
military might with its interest in sustaining its economic growth and domestic stability. As
Chinese territorial and military ambitions expand in Asia and beyond, it increases the risk that it
could lead to a substantial deterioration in trade relations with the United States. With the United
States being by far China’s most important trading partner, damaging that trade relationship
would likely have dire consequences for the Chinese economy. A slowdown or drop in Chinese
prosperity would undermine the government’s ability to fund its domestic and international plans
and could lead to a popular uprising against the current regime.
Nonetheless, the actions and pronouncements of the Chinese regime indicate that its
long-term historical vision of China’s prominent role in the world dictate an imperative to assert
its sovereignty. The regime seems bent on continuing to push its relations with the United States
to the limit in pursuit of this goal.
In the broader theoretical context, the rapid development of economies that traditionally
held little economic strength, such as China and its rise to become the largest economy with its
total Gross Domestic Product (GDP) surpassing even the United States recently, has created the
need for these newly powerful governments to prove their legitimacy through continued
economic growth as the wealth disparity has left a majority of their own populations still
economically struggling and demanding of even more economic progress for the country. When
the majority of a population struggles as their economy grows they continue on the idea that
someday the economic boom will trickle down to them. As long as the economy continues to

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climb, a government’s need for legitimacy is met because the nation’s economic progress as a
whole holds out hope for the general population despite many not yet reaping the benefits.
It is consistent with my theory that bolstered by this surging economic power, regimes of
such emerging economies at times are tempted to convert their economic power into military
power and use it to project their political and economic influence on an increasingly global scale.
The counter-balancing forces are that pushing confrontation with a dominant trading partner too
far too fast could damage economic growth so much as to undermine the source of the nation’s
emerging power and the support of its people. My hypothesis predicts that over a wide range of
choices for territorial aggression, such regimes will willingly risk what they view as being short-
term damage to trade relations for long-term gains in sovereignty. At the same time, my
hypothesis predicts that today’s socially connected populations will at some point act as a
significant constraint on the regime’s flexibility to act.
With that my hypothesis states that increasing global economic interdependence (i.e.
economic globalization) creates a threat to peace by disrupting the long-term hegemonic stability
that had existed. The rapid globalization of emerging industrial economies by definition means
that there will no longer be a single dominant world power. The emerging powers become
increasingly reliant on the economic growth that comes with industrialization and the growing
prosperity of their middle class. As these economies continue to develop rapidly they
decentralize the traditional hegemonic power structure and the nation that has imperially
dominated the increasingly globalized economy. Powered by their new wealth from the export
of cheap goods, the emerging economies face increasing temptation to prove their government’s
legitimacy through militaristic means.
At the same time that the emerging economies are empowered and tempted to assert their
military power, the once hegemonic power is less likely to push them to a disruptive

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confrontation. The once hegemonic power, in this case the United States, now has a significant
amount of economic self-interest at risk. Its increased inter-dependence in the globalized
economy means that a major military confrontation with one of its largest trading partners would
threaten that self-interest. My hypothesis predicts therefore that in the current Asian conflict, the
United States is unlikely to take the aggressive military moves it has in the past and will more
likely seek to put diplomatic and economic pressure on China instead.
In contrast, the null hypothesis would state that should the Chinese continue to escalate
their territorial aggression, the ongoing role of the US as a hegemonic power would lead it to
prioritize global political power over trade and economics with a single country. If the United
States were to respond to China in the current conflict with an immediate aggressive military
build-up in the region, it would support the null hypothesis.
Methodology
In order to conduct my research and attempt to prove my theory I have selected three case
studies focusing on the evolution of relations between China and the United States. As
background to the issues of economic globalization, I obtained data from the International
Monetary Fund that tracks the relative growth of the Chinese and US economies and from the
US Census Bureau that tracks the growth of international trade between the two countries. These
data are summarized in six graphs on pages 4-5 to which I refer in various parts of the report. To
illustrate the increased influence of social globalization in China today, I obtained data from the
Chinese government’s Ministry of information, whose department the China Internet Network
Information Center (CINIC) keeps data on the use of the Internet across China.

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I selected the three cases to represent three very different points in the economic and
social globalization of China and in its political and trade relations with the United States in
order to see how changes in these factors affected the outcomes of confrontations between the
two powers.
The cases begin in the 1950s as the United States came into hegemonic power after
World War II and the Chinese Communist Party sought to assert its sovereignty over Taiwan
while struggling economically, which resulted in a tense confrontation with the United States. I
use this first period of confrontation to highlight the beginning of United States hegemony and
an almost totally socially and economically non-globalized China.
The research then moves to the 1995-96 Taiwan Strait Incident to put China’s
Communist Party’s response in a somewhat more modern context. By 1995, China was just
emerging as a credible economic power, which involved opening its economy to world trade and
somewhat loosening control of communications to allow the beginnings of social globalization
for its population. I chose this period of confrontation in order to show the contrast to the 1950s
extremely similar conflict as the power relationships shifted in the 1990s. The United States was
still the clear hegemonic power and United States-China trade was now a more important
consideration for both sides.
For the third case study I selected China’s 2015-2016 attempts at claiming Islands in the
South China Sea, with developments continuing to play out this week. By this time, the
relationships between China and the United States are very different. China has emerged as a
larger total economy than the United States, challenging United States hegemony. It is more
conflicted by the trade-offs between pursuing territorial aggression in the name of nation-state
sovereignty and risking losing the economic benefits of a strong trade relationship with the
United States. The ability of the Chinese leaders to act is now more constrained domestically as

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its population has become much more socially globalized and more demanding of maintaining
their economic and social progress. The slowdown in the Chinese economy makes this a more
difficult process. The Chinese leaders need to shift to meet a legitimacy quota in order to prove
a government’s authority as China’s economy slows down and their annual economic growth
becomes less certain. This has led the regime to turn public attention to issues of territorial
sovereignty once again. Inconsistent with my hypothesis, however, is that the Chinese
population appears in the current crisis to be inclined to be extremely nationalistic, fanatic about
pursuing territorial aggression despite its implications for their own economic progress.
Literature Review
This paper uses the works of several authors who specialize in Chinese economic
policies, international law, and systems of control. The authors used in the research of this paper
possess a mostly Western academic influence, while others portray a perspective of Chinese
nationalism in an attempt to bring a well-rounded collection of literature. One of the books that
I’ve used to in particularly to help define my theory and framing it to highlight the threat to
peace was The Essence of Decision: Explaining the Cuban Missile Crisis written by Graham
Allison and Philip Zelikow, which focuses on the nation-state governments as actors in terms of
deciding whether or not to go to war.
Despite Alison and Zelikow’s book focusing on the Cuban Missile Crisis, it more than
aptly lays out theories that cover contention between the United States and the international
community in times of crisis and threat to peace. In particular I use their definition of the
Rational Choice Model and realism which is framed in making the decision to use military force
in times of economic crisis using two criteria: 1) The need to satiate economic deficiencies in the
domestic economy of an actor and 2) that state behavior is attributed to value-maximizing

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choices.1
Specifically in this framework each actor is defined as a national government, with
each choice being a calculated solution to a problem and each act is a goal the actor is pursuing;
we must ask why that choice was rational.
Another piece of literature that affected my thesis is National Security for a New Era,
written by Donald Snow. I found this book to be particularly helpful in the terms of defining a
spectrum of peace, as a priority of this paper is to define the greatest threat to peace. Snow starts
by defining War as “a situation where fighting remains active or likely in the absence of some
kind of restrain.”2
He goes on to define the middle ground as an “Unstable Peace” which exists
as “situations where the fighting has concluded but could resume without constraint.”3
Finally he
arrives at the point of “Stable Piece” which highlights, as the name implies, a peace that is
genuine and held together with only the need to monitor that a durable peace has been
implemented. In the scope of this paper’s research Peace falls somewhere between unstable and
stable peace as the complicated history of US-China relations shows that legitimacy of a
government’s authority is the constraint that holds together the peace between the modern
economic super powers.
A large influence on defining China in terms of a national government and the framework
I’ve presented so far is Suzanne Ogden’s book Inklings of Democracy in China, in which she
defines the Chinese Communist Party, and subsequently the People’s Republic of China, as
being forced into action by increasing socioeconomic pressure. Ogden states that a level of
democratization comes from the fact that as socioeconomics become increasingly important the
Chinese government secedes some of its totalitarian power to listen to the people; this is crucial
to the construction of the theory presented in this paper. Essentially for the Chinese Communist
1
Allison, Graham T., and Philip Zelikow. "Model I: The Rational Actor."Essence of Decision: Explaining the
Cuban Missile Crisis. New York: Addison Wesley Longman, 1971. 13-48. Print.
2
Snow, Donald M. "Chapter 12: The Menu of Activism: Peacekeeping, State Building, and Development." National
Security for a New Era. 5th ed. New York: Pearson Education, 2014. 318. Print.
3
Snow, Donald M. "Chapter 12: The Menu of Activism: Peacekeeping, State Building, and Development." National
Security for a New Era. 5th ed. New York: Pearson Education, 2014. 318. Print.

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Party to maintain a level of legitimacy to their overreaching authority of the Chinese mainland,
they’re going to have to act in ways which appease the Chinese populace attitudes. She further
says that economic development during this period of globalization has led to a deterioration of a
“just society,” specifically for China’s working and peasant classes that have lagged behind in
the economic rise of China.4
As this “Just Society” deteriorates the Chinese Communist Party
seeks alternative methods than economics to solidify the legitimacy of their authority as the
ruling governmental party, in the context of this paper they move from economic to nationalistic
legitimacy.
One of the largest influences in tandem with Ogden’s Inklings of Democracy in China is
Susan L. Shirk’s book Changing Media, Changing China which focuses on the liberalization of
the Chinese Communist Party’s media as they open up their borders in 1972 after a period of
isolationism. Specifically Shirk goes on to define the Chinese media in the context of creating a
demand for regime legitimacy stemming from public opinion that has become increasingly
difficult to control as mass-communications technology becomes readily available along with the
massive expansion of the internet in China; albeit still an incredibly censored domestic media
with little influence from outside outlets.
The literature overviewed here has served as the grounding of the research in developing
my theory. I use the framework presented in Essence of Decision: Explaining the Cuban Missile
Crisis to construct a framework of realism and subsequently the rational choice model in context
of American international conflict that barely avoided catastrophic ends. By defining peace with
Snow’s National Security for a New Era, within this framework I have a spectrum on which to
base the threat to peace this theory sets out to prove. As mentioned previously, a large inspiration
for the Inflation of Powers theory comes from both Suzanne Ogden, who coincidentally enough
4
Ogden, Suzanne. "Introduction." Inklings of Democracy in China. Cambridge, MA: Harvard U Asia Center, 2002.
2-5. Print.

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is a former professor at Northeastern University although I never had the pleasure of have lecture
with her, and Susan L. Shirk. Ogden and Shirk’s books similarly that focus on the paradigm that
the Chinese Communist Party has progressed into social, politically and economically as
economic globalization has created incentive to move towards policies of economic expansion at
the expense of state control.
Overview of Cases and Theory
The first case study that illustrates the evolution of United States hegemonic authority
over China’s entry to the modern paradigm of a globalized theatre is the Taiwan straits crisis
which began in 1953 lasting through 1958 in which mainland China bombarded the Taiwanese
islands of Kinmen and Matsu, but was forced to back off when US President Eisenhower sent in
the American Seventh Fleet to support Taiwan.
This case illustrates a time in which the United States was the clear global hegemonic
power and China was a very un-globalized economy. These conditions meant that in the
confrontation, realism theory implies that China had nothing to lose economically or in the
related impact on domestic tranquility. The Chinese Communist Party likely believed therefore
that it had the flexibility to use its relatively meager military power in a contained regional
theatre. By drawing on the same theory of realism, the United States had nothing to lose
economically in terms of trade with China and likely felt it had flexibility and domestic support
to respond with its overwhelming global and political might to confront China in the Asian
region.
The second case study focuses on the Taiwan straits crisis of 1995-96 in which mainland
China fired missiles over Taiwan territory as a means of intimidating the Taiwanese people into

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supporting the One China policy rather than maintain a policy of strong independence during that
year’s Taiwanese presidential elections. Again, the US responded with a display of massive
naval power in the area. This time, China did not back off as readily and instead responded with
its own military build-up.
My theory is that this increase in instability, that is less peace by my definition,
accompanied increasing globalization of the Chinese economy which gave the Chinese
Communist Party a greater sense of military power, but had still not reached a stage where its
trade with the United States had reached significant enough levels to represent a realistic threat
to the Chinese economy and the related domestic support of its people.
Graph 1 shows that by the mid-1990s the pace of total GDP growth was just beginning to
accelerate, but that total Chinese GDP was still a fraction of United States GDP. The Chinese
leaders, therefore, likely felt that they had the flexibility again to use their still limited military
power in a regional confrontation with the United States. Related to my hypothesis, Graph 3
shows that even with the moderate gains in China’s per capita gross domestic product since they
opened their doors to economic globalization in 1972 beginning with the iconic visit of President
Nixon, economic gains had yet to reach a majority of the Chinese population as personal wealth
lagged behind.5
The focus for the Chinese Communist Party has traditionally been for annual
economic growth and not on the issue of addressing wealth disparity, working on an ideology of
trickle-down-economics. At the time of the 1990s Taiwan crisis, therefore, the Chinese people
had little to lose from their government antagonizing US economic relations.
By the same theory of realism, the United States regime at the time probably also felt that
there was no significant threat to its economy and related domestic political support from the
American people from engaging in a confrontation with China in the Asian region. Graph 4
5
Deng, Yong, and Nancy Bernkopf Tucker. "Strait Talk: United States-Taiwan Relations and the Crisis with
China." The Journal of Asian Studies 70.4 (2011): 1144-6.ProQuest.45 Web. 2 Apr. 2016.

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shows that US exports to China were minimal in the mid-1990s. The United States had more to
gain from the greater global security that would result from its maintaining its hegemony than it
had to lose from the insignificant trade it had with China at the time.
The third case examines the recent build-up of Chinese presence and military capability
in islands in the South China Sea in 2015-2016. By taking a step back and looking at how the
total value of China’s gross domestic product has evolved by 2015 in Graph 1, the data show that
China has progressed economically in the global market with an astounding surge that has held
steady, annual economic growth for decades. Mainland China’s economy in recent years has
even surpassed the United States in global share of gross domestic product. It isn’t too hard to
see how the Chinese Communist Party has become accustomed to this annual economic growth
as a given, despite giving up the once totalitarian hold they had on the domestic market during
their period of isolationism.
As the Graph 4 demonstrates, by 2015 growth in trade of goods in billions of dollars
between the United States and China shows the contrast in the trade between the duo of
economic superpowers as China’s growth shows an increased dependence on the United States
economy. As the interdependence continues to grow even in a contemporary context, under the
assumption of realism China should become less aggressive towards the United States. However,
economic turmoil of the Chinese economy has the potential to create a more aggressive state as
failing economic legitimacy is compensated for by traditional Chinese Communist Party displays
of nationalistic legitimacy via foreign policy and international relations; a move in the self-
preservation of the regime to seek legitimacy in a new form as economic legitimacy becomes
questioned by its people.
Graph 5 shows that China’s economic growth has rapidly made it the United States’ most
important export market outside of North America, displacing Japan, Germany and the UK in

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recent years. This means that the United States regime has a significant self-interest in not
upsetting economic relations with China despite China’s military aggression.
Important to the context of my hypothesis, Graph 3 shows that since the mid-1990s
Taiwan crisis, there has been rapid growth of GDP per capita in China. This implies that the
general population in China is realizing much more of the benefits of economic growth, and
would have much more to lose from its government’s destabilizing economic relations with the
United States.
Directly related to my hypothesis is Graph 7 which shows the surge in the Chinese
population’s social globalization as reflected in the per centage of the Chinese population using
the Internet. It grew from only about 5% in 2002 to 50% in 2015. These data are provided by
the Chinese government’s Ministry of Information through its department China Internet
Network Information Center (CINIC).

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The 50% penetration rate of China’s enormous population translates to 668 million
Internet users in the country, which is about twice the size of the United States population. The
CINIC data show that penetration among China’s urban population reached 72% in 2015.
Among urban dwellers in the 10-29 age group, penetration is 85%, meaning that the coming
generation is nearly all socially globalized.
1953-1958 Taiwan Strait Crisis
In an effort to show United States-China relations during a time of Chinese economic
struggle clear United States hegemony, this paper chooses to highlight the relationship and

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confrontation between the Mao Zedong’s People’s Republic of China and President
Eisenhower’s administration in the United States in 1953-1958.
At this point in time, the United States was in an upswing economically and militarily as
it took on the mantle of a hegemon in the post-World War II era. As the United States solidified
its economic dominance, other nations were still recuperating from the war. As part of this
growth into hegemony the United States took a global stance against communism, which it
viewed as a critical threat to its economic beliefs and stability. The opposition to communism
had a dominant military dimension, with President Eisenhower keeping in line with the nuclear
Massive Retaliation Doctrine that had relatively recently been established under the presidency
of Harry S. Truman. President Eisenhower faced pressure from the threat to United States
sovereignty and growing public domestic sentiment against communism.6
The First Taiwan Strait Crisis took place in this context. China was coming into the post-
World War II international stage only a few years after the Chinese Civil War had quieted down
and with Mao Zedong coming into control of mainland China in 1950.
To understand fully the implications of the crisis one must look at the events that led to
the boiling point. Mao’s newly formed government, which was ruled explicitly by the Chinese
Communist Party, seized its legitimacy by conquering a large majority of the Chinese mainland
during the late 1940s. The United States looked at this as a major defeat in foreign policy as the
rise of a powerful communist state at the beginnings of the Cold War.7
Meanwhile in Southern China, Mao’s anti-communist enemy Chiang Kai-shek formed
the Kuomintang government under the Republic of China, abbreviated KMT and ROC
6
Burch, Justin E. "The Taiwan Straits Crisis of 1954-1955: The Contemplation of Going to War Over Foreign
Troop Morale." Order No. 1537840 University of Central Oklahoma, 2013. Ann Arbor: ProQuest. Web. 2 Apr.
2016.
7
Chervin, Reed H. "Turmoil in the Taiwan strait: Wellington Koo and ROC foreign policy 1953-1956." East Asia:
An International Quarterly 30.4 (2013): 291+. General OneFile. Web. 21 Mar. 2016.

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respectively, fighting Mao’s communist army throughout the late 1940s. Defeated by Mao in
mainland China, Chiang Kai-shek relocated with approximately 1.3 million Chinese supporters
to the Chinese island of Taiwan in 1949 and declared itself the true government of China. This
move has since defined China’s attitude on international sovereignty because it views an
independent Taiwan as a challenge to the ideology of its “One China, One Nation” policy.8
An important role in Taiwan-US relations emerged in the late 1940s as Ambassador
Wellington Koo was tasked with diplomacy with the United States by Chiang Kai-shek in 1946
to increase the international recognition and relations of the Republic of China with other
nations. Ambassador Koo was one of Chiang Kai-shek’s closest confidants and was able to
diplomatically align Taiwan with the United States as a staunch anti-communist ally and the only
high-ranking Chinese official to have a western name, helping him gain military defense support
from the United States and creating an anti-communist narrative for the Republic of China in the
Cold War.9
To pair with Wellington Koo’s anti-communist sentiment he also was a large proponent
of building a Taiwan infrastructure that facilitated international trade, developing the domestic
economy and consolidating political power within the Republic of China and aligning its goals
with that of the United States. These moves kept the national identities of the Republic of China
and the mainland People’s Republic of China as starkly and ideologically different, an important
move going forward with increased relations with the United States. The importance of Taiwan
was a strategic necessity for the United States as letting the nationalist Republic of China fall to
the communist People’s Republic of China would be a major setback in the Cold War. United
8
China." The Journal of Asian Studies 70.4 (2011): 1144-6.ProQuest. pg. 2 Web. 2 Apr. 2016.
9

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States support was essential as the outlook for the nationalist government looked grim against the
People’s Liberation Army.10
As Mao Zedong attempted to extend his power over Taiwan and prove his revolution
legitimate by “unifying” the Chinese people under the People’s Republic of China and China’s
Communist Party rule, he was met by opposition from the United States Navy under President
Harry Truman. President Truman sent in a naval blockade of US battleships from the Seventh
Fleet into the Taiwan Strait in an effort to prevent a Chinese invasion of the island from the
mainland.11
This United States intervention in the Chinese Civil War came at the same time as the
United States entered the Korean theatre and the Seventh Fleet was dispatched to the region on
June 27th
, 1950. President Truman ordered the blockade specifically in an attempted to bring a
cease-fire between the People’s Republic of China’s People’s Liberation Army and the forces of
Chiang Kai-shek and also to increase United States military presence in Asia as the war in Korea
was waged.
For the United States, this was in an effort not only to stop the People’s Liberation Army
from seizing Taiwan but also to prevent them from gaining a global tactical advantage for the
communist regime and its allies, most notably the Soviet Union. This showed an attempt by the
United States under President Truman’s Massive Retaliation Doctrine to engage in limited
regional military actions to protect nations from the communist ideology expansionary interests
of the Soviets in defense of democracy as defined and championed by the United States.
10
Accinelli, Robert. “Crisis and commitment: United States policy toward Taiwan, 1950-1955.” UNC Press Books,
1996.
11
2016.

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President Eisenhower and Secretary of State John Foster Dulles contemplated how the
United States would intervene, despite international pressure to not intervene with military
power. They debated the need to hold up the Massive Retaliation Doctrine of their predecessor
or diverge down a path of diplomacy. The problem Eisenhower and Dulles faced was that many
in the international community feared an atomic outcome between the nuclear United States and
the People’s Republic of China’s nuclear ally the Soviet Union.12
The challenge was to support the Kuomintang government’s move in 1949 to consolidate
its power to Taiwan and some surrounding islands in the Taiwan Strait, which are the waters
between Mainland China and Taiwan. The Maoist Chinese government, however, was obsessed
with retaking Taiwan. When the Eisenhower administration formally recognized Chiang Kai-
shek’s Kuomintang government as the sole legitimate government of China, the communist
Chinese regime saw it as a knife in the back of the legitimacy that Mao Zedong had led a
revolution to fight for.
The actions taken and attitudes reflected in the First Taiwan Strait Crisis highlight the
United States’ need to prove legitimacy of democracy through defense of weaker democracies,
or political systems under threat from communist regimes, in terms of economics and military
power as the ideological Cold War with communism was waged. In contrast, the Chinese
Communist Party struggled both ideologically and economically as Chiang Kai-shek bolstered
Chinese opposition against Mao in South China.
Meanwhile the People’s Republic of China declared that Taiwan and the Chinese people
there must be “liberated” from Chiang Kai-shek’s Kuomintang, furthering the ideological stance
of the “one China, one nation” policy. The Seventh Fleet naval blockade that had been imposed
12
2016.

24
under the Truman administration was lifted by President Eisenhower, with the advice of
Secretary of State Dulles, in 1953 as to allow for the KMT forces to set up defenses along islands
in the Taiwan Strait against mainland People’s Liberation Army forces. As Secretary of State
Dulles put it, “unleash Chiang on the mainland.”13
It is worth noting that with the restrictions of the Seventh Fleet lifted in the Taiwan Strait,
the mission of the Republic of China was larger in scope than to simply defend themselves from
a People’s Liberation Army assault. Ambassador Wellington Koo relayed to Secretary Dulles
that the goal of Chiang Kai-shek’s Kuomintang mirrored that of Mao Zedong’s Chinese
Communist Party in the fact that they sought to unite mainland China, but with the now exiled
government in Taiwan. The Seventh Fleet stood by in the Strait keeping watch as restrictions
were lifted and the People’s Liberation Army, under the control of the CCP, started
bombardments on the KMT-controlled islands of Kinmen and Matsu
The confrontation between Kuomintang forces and the People’s Liberation Army
continued to escalate, threatening the beachhead of Taiwan against the communist forces of
mainland China. For the United States under the Truman Doctrine (Massive Retaliation
Doctrine) the idea of letting the communist forces prevail would have been a daunting loss for
the Eisenhower administration. In 1955 the United States Congress approved the Formosa
Resolution, which gave Eisenhower the power to use military force to protect Taiwan, while
additionally threatening the use of Nuclear weapons. While the threat of nuclear war led to the
US receiving international backlash from the UN and NATO, the United States ultimately held a
firm stance on the Truman Doctrine.
The People’s Liberation Army retreated as American approval for massive military force
including a nuclear option was approved. The mainland Chinese population strongly opposed
13

25
their government taking them into a nuclear war. The real fear of the use American nuclear
weapons in Asia was all too fresh given that the bombings of the nearby cities of Nagasaki and
Hiroshima had occurred less than ten years earlier. With Taiwan now being rightfully claimed by
the Republic of China it quelled the aggressiveness of the People’s Republic of China to
“liberate” Taiwan immediately. In the face of massive retaliation from a nuclear state, the fears
of an upset populace will outweigh the issues of nationalist legitimacy.
What this case illustrates is a period in which there had been no economic globalization
on China’s part and essentially no trade between the United States and China. Neither nation
had any sense of realism influencing them because neither had any direct economic interests at
risk if a military conflict did break out. The matter was decided on both sides strictly on issues
of sovereignty and military power. The communist Chinese regime was willing and ready to use
the full force of its army to seize Taiwan. The United States was willing and ready to use the full
force of the Seventh Fleet to prevent an invasion of Taiwan and its nuclear power if necessary.
Against such overwhelming power, the Chinese had to back off. The impact on trade and mutual
economic relations was not an issue for either side.
1995-1996 Taiwan Strait Crisis
This next case is used to show how China dealt with international confrontation once they
had gained globalized economic strength, and in effect had put capital toward growing military
strength. The 1995-1996 Taiwan Strait Crisis showed an escalation from both the United States
and the People’s Republic of China, which was still under the control of the Chinese Communist
Party although several decades since Mao Zedong’s death in 1978. Forty years after the first
Taiwan crisis naval forces were again deployed from the United States in defense of the

26
Republic of China in Taiwan as mainland China began conducting missile tests in the Taiwan
Strait in March of 1996.14
The American commitment to the Truman Doctrine to defend democratic allies from
communist threats persisted even after the Cold War essentially ended with the fall of the Soviet
Union in 1991. Both the United States and China at this point had developed a stronger sense of
economic self-interest than they had in the 1950s due to growth in their trade relations15
. From
China’s perspective, the Chinese Communist Party had focused on domestic economic issues in
recent years with the economic gains of the Chinese people outweighing the benefits to the
regime of trying to enhance its authority by “reclaiming” Taiwan.
Compared to isolationist China of the 1950s, the People’s Republic of China in the 1990s
had taken huge reforms to try to become more of an open economy which started in 1972 when
President Richard Nixon made an official visit to Mao Zedong’s China. Since President Nixon’s
historic trip to communist China, the main focus of Chinese Communist Party’s building of
legitimacy was on the steady economic growth of the Chinese economy as it became
increasingly globalized.
As part of this process, the Chinese Communist Party began loosening restrictions on the
traditional state controlled media by offering subsidies to news outlets, television and radio
stations and magazines. They viewed this liberalization as being necessary for China to
modernize as they entered global markets and generated additional revenues.16
This in itself was
a huge step towards the Chinese Communist Party’s attributed pursuit of economic self-interest,
for lessening their totalitarian grip on media contributed to their people’s attention becoming
increasingly focused on economic prosperity. They realized that their traditional media control
14
China." The Journal of Asian Studies 70.4 (2011): 1144-6.ProQuest. Web. 2 Apr. 2016.
15
United States. United States Census Bureau. Foreign Trade. US-China Trade 1980-2015. N.p.: n.p., n.d. Web. 04
Mar. 2016.
16
Shirk, Susan L. Changing Media, Changing China. Oxford: Oxford UP, 2011. 8-9. Print.

27
had only been hindering the legitimacy of the regime in accomplishing that prosperity. The
Chinese government relinquished the control despite feeling incredibly self-conscious of critical
public opinion.17
Despite decades of economic and state reform, China in 1995 was still considered a
relatively poor country in terms of global economics, especially when compared to the
globalized economic dominance of the United States in the 1990s. As shown in Graph 2, by 1995
China accounted for only about 5% of global GDP while the United States accounted for over
20%. China’s trade levels with the United States at this point were on the rise, although
relatively their trade was still at moderate levels.18
Graph 4 shows that in 1995 China accounted
for only 4% of the United States’ total global trade and less than 2% of the United States’ total
exports.
The Chinese government felt pressure to progress economically, leading it to confront
ancient cultural barriers to development. One example was the cultural Confucian philosophy of
having unequal subordinates which depended on absolute control by the master. The regime
contradicted these traditions as it continued to lessen state control to allow the free market to
flow.19
Additionally trade between the United States and China was small enough in the mid-
1990s that the United States, under President Bill Clinton, felt the importance to United States
hegemonic legitimacy in defending a free Taiwan government outweighed avoiding
confrontation with the People’s Liberation Army. The United States at this time was still in clear
levels of hegemony with its military and economic might growing throughout the 1990s, along
with the collapse of the Soviet Union that had been its greatest challenger to hegemony.
17
Shirk, Susan L. Changing Media, Changing China. Oxford: Oxford UP, 2011. 7. Print.
18
Mar. 2016.
19
Ogden, Suzanne. "Introduction." Inklings of Democracy in China. Cambridge, MA: Harvard U Asia Center, 2002.
2-5. Print.

28
Nonetheless, United States trade with China had progressed far enough that neither side wanted
to appear completely reckless. President Bill Clinton had recently beaten one-term incumbent
George H.W. Bush on a campaign that attacked military spending that resulted in creating an
increase in American tax rates.20
He was not keen to enter into a conflict to China that would
require greater military spending and raising taxes.
The mainland Chinese and Taiwanese economies were becoming increasingly
interdependent throughout the 1990s. Contrary to the increased economic interdependence that
had developed, the political relationship still consisted of hostilely opposing ideologies and
claims to being the sole legitimate Chinese government.21
However this increased economic self-
interest between mainland China and Taiwan likely explains why both the United States and the
People’s Republic of China sought to quell their display of military power less aggressively in
contrast to the 1950’s nuclear threats from the United States. Both countries used much less
hostile language in asserting their powers during the second Taiwan crisis.
The events of the 1995-1996 Taiwan Strait Crisis started in July of 1995 as the People’s
Liberation Army started what they claimed were “missile tests” in the Taiwan Straits. These
“tests” were obviously a show of power and military intimidation, which the Chinese Communist
regime never really denied. The missile tests were a clear response to what the Peoples Republic
of China criticized in parallel as increased United States relations with the illegitimate Taiwanese
government, as nationalist legitimacy had become more important than traditional Marxist-
Leninist party legitimacy. The Chinese Communist Party had ruled as the sole legitimate party in
the People’s Republic of China through these years.22
It was not used to public criticism. In this
context, the People’s Republic of China had been irritated by the United States issuing a visa to
20
Barilleaux, Ryan J., and Mark J. Rozell. Power and Prudence: The Presidency of George H.W. Bush. College
Station: Texas A & M UP, 2004. 5-6. Print.
21
Zhao, Suisheng. Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis. New York:
Routledge, 1999. pg. 2-3 Web. 25 Mar. 2016.
22
Zhao, Suisheng. Across the Taiwan Strait: Mainland China, Taiwan, and the 1995-1996 Crisis. New York:
Routledge, 1999. Web. 25 pg. 5-7 Mar. 2016.

29
Taiwan President Lee Teng-hui allowing him to speak at Cornell University, his alma mater.23
The People’s Republic of China saw this as the United States giving Taiwan and the Taipei
government the opportunity to give unfair perceptions of the Taiwan-mainland China situation to
an educated American audience.
In response to the People’s Liberation Army’s missile tests, President Clinton sent in two
aircraft carrier battle groups to the waters near Taiwan to “conduct naval exercises.”24
In reality,
they were sent to patrol the Taiwan Strait and deter a mainland Chinese attack. This caused an
escalation in the show of military power as China then sent in Soviet era battle cruisers, modern
submarines and war planes to match the display and mobilization of United States military
forces. Although mainland China had put effort into modernizing their military, the United States
had a significantly more modernized military with larger investment. However, actual
confrontation was carefully avoided by all sides of the crisis.
The situation eventually deflated because of the international opposition to the military
buildup on both sides and the People’s Republic of China’s recognition that the crisis only
strengthened President Lee’s position as executive domestically within Taiwan and convinced
the United States to increase weapons sales to Taiwan.25
The Chinese Communist Party’s
attempts at proving a nationalist legitimacy in the form of hostile military threats had once again
failed. They took the bullet to nationalist legitimacy at the expense of retained economic ties
with both the United States and Taiwan to at least preserve their economic legitimacy; the
damage to legitimacy caused by the loss of trade partners had officially outweighed that of the
nationalist “One China, One Nation” policy.
23
24
25
Scobell, Andrew. "Show Of Force: Chinese Soldiers Statesmen, And The 1995-1996 Taiwan Strait
Crisis." Political Science Quarterly (Academy Of Political Science) 115.2 (2000): 227. Military & Government
Collection. Web. 21 Mar. 2016.

30
This second case illustrates the influence that increased trade relations had on the
character of the People’s Republic of China in terms of globalized economics being a higher
priority and the United States’ willingness and readiness to engage in military conflict over the
defense of democratic legitimacy. Sustaining economic growth in the 1990s was a higher
priority for the Peoples’ Republic of China than it had been in the 1950s because the importance
of United States-China trade was increasing to both sides. The economic self-interests’ led to
avoiding the extreme military threats of force and massive retaliation of the 1950s, but with the
United States’ clear hegemonic power again winning out and reestablishing stability
As the world economy became increasingly globalized China’s economic self-interest
had become more reliant on the economic interdependence that comes with economic
globalization. In terms of realism and assuming they were acting as a rational actor, to support
the longevity of the Chinese Communist Party’s regime, the leaders concluded that they must
sacrifice their nationalist legitimacy to provide the economic prosperity that would solidify their
position. This meant as they had to back down in the face of opposition to aggressive nationalist
action via hegemonic intervention on both economic and militaristic fronts from the United
States.
What is important in terms of my thesis is that even as late as the 1990s Taiwan crisis, the
PRC regime was acting according to its own perceptions of international power plays with the
United States. Its own people still had little influence on the decision making process. This is
partly due to the fact that the people had little wealth to lose. As shown in Graph 3, per capita
income for the Chinese masses was under $1,000 per year compared to about $30,000 for
Americans. The Chinese people had little incentive to urge their government to any other course
of action than the leaders felt was best for the country.

31
Modern Chinese Island Claims and the Asian-Pacific Balance
The final case used for the research looks at the modern attempts from China’s
Communist Party to claim Islands in the South China Sea from other weaker nations. In 2015,
China started aggressively to claim islands and carve out a large swath of oceanic territory in the
South China Sea.
The socioeconomic landscape today has changed drastically compared to that of the past
case studies as China has emerged as the world’s largest economy, even recently passing the
United States in Gross Domestic Product.26
As the trade between the United States and China
has skyrocketed in the past two decades, in terms of realism and acting in interest of economic
globalization, both nations should view strong economic ties with each other as a reason to seek
to maintain global and domestic peace. Although the Peoples’ Republic of China has historically
shown that they have sacrificed a great deal of their nationalist legitimacy and state control as
they have enjoyed decades of annual economic growth and prosperity.
26
Mar. 2016.
Map of the South China Sea
illustrating China's claims and
UNCLOS Exclusive Economic Zone.
Source: BBC News "Q&A: South
China Sea dispute," UNCLOS and
CIA

32
Over the past few years there have been rather large protests taking place in China in two
realms, the first over nationalist claims on Islands in the South China Sea by other Asian
competitors such as Japanese citizens trying to lay claim to the Dekku Island Chain which China
has also seen as historically part of its territory. The second set of protests has been over the
shrinking of the Chinese economy for the first time in decades as factory owners start to
downsize, laying off workers and straight out not paying wages. As China has progressed
economically they have given up some control over their media and propaganda to new
communications technologies that make the control of information harder, and controlling the
attitudes of Chinese citizens increasingly difficult.
At the same time, however, China’s rise as a prominent global economic power reflects
that the United States hegemony in modern times, in terms of globalized economics, is
deteriorating as new rapidly developed economies emerge to match their economic might. In this
context, the stabilizing power of hegemony has declined as the United States continues to
struggle economically. As the threat of hegemony is overshadowed by global economic standing
and recent contractions in mainland China’s economy for the first time in decades, the Chinese
Communist Party’s economic legitimacy is not only questioned domestically but in a very real
sense damaged. As Chinese factories begin to shut down or downsize and owners refuse to pay
wages to factory workers, the Chinese Communist Party acting as a rational actor in terms of
realism and self-preservation of their legitimacy is under pressure to seek alternative methods to
solidify legitimacy.
With the need to prove their legitimacy as the sole ruling party of the Peoples’ Republic
of China, the regime turns to familiar nationalist aggression in the Asian theatre. In this modern
context China has been emboldened to claim large areas of the South China Sea through claims
to numerous Islands which they have previously not had claim to on the modern world stage.

33
The reemergence of the Chinese Communist Party’s aggressive attempts to prove nationalist
legitimacy ranges back to the largest upset of nationalist demands from mainland China’s
populace in 2012, in which large-scale protests occurred in response to nationalistic Chinese and
Japanese civilian activists claiming the mostly useless Daioyu and Senkaku Islands.27
The
protests escalated as news spread quickly across the now vast but still state-controlled media.
Due to the vast liberalization of the Chinese media over the past several decades, the
Chinese Communist Party lacked the resources to effectively shut the story down before
spreading to enough news outlets that a blackout would be ineffective. Even with China’s
ownership of internal social and news media, information spreads far and fast to over 600 million
internet users including over 70% of the urban population most likely to be involved in
protests.28
News agencies in modern China operate under two driving forces: policy issued by the
regime’s Propaganda Department and the demand of the market. These two motivating forces
move news content to amplify nationalist public attitudes on foreign policy and create a need for
the Chinese Communist Party to appease the public.29
The market now dictates the Chinese Communist Party’s need for legitimacy via the
media and its liberalization that attempted to modernize the economy. The top priority of the
Chinese Communist Party is to maintain the legitimacy of their rule with their largest worry
being a nationwide movement of disgruntled public groups united by the very nationalism that
the market generated.30
The stride for economic legitimacy has, in a sense, tied the hands of the
Chinese Communist Party regarding foreign policy as the market increasingly demands and
27
Bradsher, Keith. "Activist Chinese Group Plans More Anti-Japan Protests."Www.nytimes.com. The New York
Times, 20 Aug. 2012. Web. 09 Apr. 2016. http://www.nytimes.com/2012/08/21/world/asia/activist-chinese-group-
plans-more-anti-japan-protests.html
28
Shirk, Susan L. "10: Changing Media, Changing Foreign Policy." Changing Media, Changing China. Oxford:
Oxford UP, 2011. 232-33. Print.
29
Oxford UP, 2011. 226-27. Print.
30
Oxford UP, 2011. 227. Print.

34
incites public discontent over a lack of nationalistic legitimacy of the regime. The Chinese
people were demanding a show of nationalistic strength from their regime to prove their
dominance of the Asian-Pacific region.
The extent of these claims, in an effort to provide foreign policy to appease the
nationalistic demands of the mainland China, is far beyond the past claims to the traditional
Chinese island of Taiwan and the aforementioned Daioyu and Senkaku Islands; as shown in
Figure 4 on page 27, the map illustrates the extent to which the People’s Republic of China has
claimed in the South China Sea. The international community generally views the current
Chinese claims as being ridiculous, in most part to historically China relinquishing the islands to
Japan in an agreement between the two Asian powers and the United States; also due to the lack
of any strategic or economic value of the Daioyu and Senkaku islands, marking it as a show of
nationalist attitudes.31
More recent claims however would give China sovereignty over the
majority of the South China Sea contrary to international norms of open seas and would infringe
on the borders of other sovereign states.
The surge of nationalistic aggression comes as the Chinese Communist Party’s economy
takes the first hit in years as it shrinks instead of the annual economic growth that the Chinese
people have become accustomed to.32
This case appears to show China’s economic downturn
leading to old habits of proving their authority to their own people with militaristic strength in
order to bolster Chinese patriotism/nationalism. The threat of conflict becomes more of a reality
as nationalist Chinese sentiment towards Japan grows grim with the recent change of Japanese
security laws regarding their military and the increased ability to mobilize their armed forces
internationally. The Republic of China’s news media is already quickly showing concerns of
31
Nishi, Takayuki. "The Daioyu/Senkaku Islands: A Japanese Scholar Responds." Www.nytimes.com. The New
York Times, 04 Oct. 2012. Web. 09 Apr. 2016. http://kristof.blogs.nytimes.com/2012/10/04/the-diaoyusenkaku-
islands-a-japanese-scholar-responds
32
Mar. 2016.

35
nationalist security in the state-owned Xinhua news agency claiming Japan has abandoned its
post-World War II constitution restricting their military role to being strictly defensive.33
The Chinese Communist Party is increasingly influenced in foreign policy by public
demands of legitimacy that it created itself in an attempt to modernize the economy, media and
communications technology and in turn has taken the very control that the regime once held
most valuable. In an ironic fashion, its attempts at bringing legitimacy and control to the regime
through economic globalization has taken away a significant amount of the totalitarian control
that the Chinese Communist Party has enjoyed for over eighty years.
As recently as March of 2016 China continues to publicly denounce Japan as they publish
textbooks claiming the Daioyu Islands.34
The inflation of the public’s demand for nationalistic
legitimacy continues to affect China’s Communist Party’s foreign policy and drives increasingly
aggressive oceanic claims in the Asian-Pacific region. The chance of conflict becomes higher as
the Chinese regime, acting in terms of realism as a rational actor, struggles to hold onto
legitimacy as they are faced with economic turmoil and dangerous nationalist attitudes.
Conclusions
This paper has looked at a variation in the theories of international relations that reflects
what could be an important shift in how regimes pursue power on the international stage. It
shows that traditional theories of economic globalization, realism and long-term hegemonic
stability theory all still play an important role in explaining how regimes view their self-interests
in global politics. It adds a new twist in hypothesizing that the surge in social globalization
33
McCurry, Justin. "China Accuses Japan of Threatening Pacific Peace with Military Law." Www.theguardian.com.
The Guardian, 29 Mar. 2016. Web. 18 Apr. 2016. http://www.theguardian.com/world/2016/mar/29/china-accuses-
japan-of-threatening-peace-in-pacific-with-new-law
34
"China Protests Japanese Textbook Revisions on Disputed Islands." Rappler. Agence France-Presse, 22 Mar.
2016. Web. 19 Apr. 2016. <http://www.rappler.com/world/regions/asia-pacific/126774-china-japan-textbooks-
disputed-islands>.

36
could limit those regimes’ flexibility in pursuing confrontational international agendas as their
own populations gain more influence on regime decision making.
The progression illustrated in the three case studies generally supports the part of the
hypothesis that the more socially globalized Chinese population is exerting more control over the
regime’s decision making than in the past. The surprise in the research is that the Chinese people
are not behaving like rational economic actors trying to sustain their personal economic progress.
They have been so far much more swayed by fanatic nationalism and turning to the streets to
force their government to be even more aggressive territorially than it thinks prudent. This is a
significant threat to world peace.
This variation on the hypothesis has important implications for policy makers in both
China and the United States as well as for their various allies as they seek solutions to these
kinds of confrontations in the modern context. It suggests that the Chinese regime’s flexibility to
control the tone of their territorial aggression is not only lower than it has been in the past but
also lower than traditional theory would suggest. The value of the research is that it suggests to
policy makers seeking solutions that the United States and its allies should be more creative in
the kinds of policies they use to respond to China’s actions, including appealing directly to the
Chinese people through social media to prioritize their own economic self-interest over extreme
nationalism and territorial aggression. This approach could reduce the risk of serious
confrontation and its dire implications for the US economic interests.
As the economic paradigm shifts in the increasingly globalized world, the balance of
powers created by the hegemonic presence and authority of the United States is diminished as
China moves away from steady economic growth and struggles to prove the legitimacy of their
authority internally. The regime’s distraction on international aggression itself threatens global
peace as China makes more confrontational attempts to prove the strength of the regime and

37
sovereignty of the nation. What the research shows is that the regime’s agenda is only half the
story. They have even been surprised at the reaction of the Chinese public, whose fervor for
aggression may get out of their control.
In the historical context of the two earlier case studies, the idea of China again trying to
confront Taiwan and fulfilling the “One China Policy” should rationally increasingly become a
pipedream as the reliance on economic ties with countries like the United States are contingent
on peace with Taiwan. As mainland China begins to be plagued with economic contractions,
however, their aggression has risen in the Asian region. While the original hypothesis framed the
issue to be a threat to peace contextually in regards to the absence of conflict with the United
States, the threat to peace in the Asian-Pacific region with neighbors such as Japan and the
Philippines is brought into question. An armed conflict or military confrontation between the
Peoples Republic of China and its Asian neighbors would not exclude the United States from an
escalation of conflict.
Still, the forces of economic realism continue to work in the direction of peace. China's
recent entry into the World Trade Organization came to fruition with support from the United
States as China's surge in trade with the United States doubled from 1995-2000 as seen in Graph
4. That increase in trade meant that it was in the interests of both the United States and the
Chinese Communist Party regime to set the basic rules for fair and growing trade between the
countries, which is why China applied for membership and the United States supported their
move.35
Both actors were acting rationally in their own economic self-interest, falling in line
with realism.
Asia has an overall resilient economic outlook, with China’s current slowdown actually
being one of the larger reasons for it lagging behind in regionally contemporary economic
35
IMF WEO. "Regional Economic Outlook: Asia and Pacific." IMF ELibrary Data. International Monetary Fund, 9
Oct. 2015. Web. 15 Apr. 2016. http://data.imf.org/?sk=abff6c02-73a8-475c-89cc-ad515033e662

38
globalization36
. Mainland China only shows moderate economic recovery throughout 2020
according to International Monetary Fund estimates, while its economy is not projected to
surpass what is now a historical peak as the Chinese Communist Party and mainland China’s
population deal with the first economic contraction in decades.37
With the risk of commodity
prices rising there is a potential for shocks to the economy and prices of commodities causing
widespread economic backlash. The IMF recommends the implementation of carefully planned
macroeconomic policies in order to prevent a stunt in Asia’s regional economy as China market
demand shifts and the strength of the United States Dollar stabilizes internationally.
As the research for the Inflation of Powers theory comes to a close it is difficult to say
exactly what the future holds in terms of a stable peace. However as China’s Communist Party
has struggled in recent years economically there has been a noticeable shift from economic self-
interest that one would expect in the economic globalization paradigm towards a populace with
aggressive nationalist attitudes. As Chinese economic contraction begins to show an artificially,
and unintentionally, created public demand for nationalistic legitimacy of the Chinese
Communist Party from their citizenry. This upswing in nationalist attitudes sings a familiar tune
as the Chinese population develops the need to claim even useless islands in the South China
Sea.
The Peoples Republic of China struggles with the self-created problem of nationalist
foreign policy expectations from the population, which manifested itself through China’s
Communist Party’s inability to decide on either complete state-controlled media or a free market
approach. The demand created has the Chinese Communist Party’s hands tied as we witness
what can be described as “inklings of democracy in China,” as Suzanne Ogden would put it.
36
37

39
Therefore this paper concludes that China’s rapid ascension in the latter half of the 20th
century
and the first decade of the new millennium has fostered an unstable socioeconomic environment
as the longtime annual growth was taken for granted. To reference Robert Keohane’s analogy of
Lewis Carroll’s Alice in Wonderland (although really it’s a reference to Carroll’s Through the
Looking Glass) one final time, China continues running faster in an attempt to simply keep
standing still; China’s Communist Party has created a paradigm of legitimacy that demands more
than it can deliver to China and it will keep running with that demand with the hopes of one day
stabilizing the artificial market of legitimacy.

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