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In order to ‘walk, chew gum, and play chess’ at the same time, the US will have to both invest at home and sign more trade deals. A speech late last month by Jake Sullivan, President Biden’s national security adviser, on “Renewing American Economic Leadership” clarified that the administration wants to build resilience to “de-risk” from China. But dealing with Beijing will require more than investing at home. Washington also needs to re-engage in negotiations with China to manage difficulties in the bilateral relationship. And to better compete, the United States should get back into the business of signing trade deals. As Trade Representative Katherine Tai quipped during her 2021 confirmation hearing, the United States can “walk, chew gum, and play chess” at the same time. The Biden administration should not only invest in domestic resilience, but also participate in new trade agreements and negotiate directly with Beijing. Over the past two years, China joined the Regional Comprehensive Economic Partnership (RCEP), began acceding to the Digital Economy Partnership Agreement (DEPA), and applied to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). China’s integration into these new frameworks will create efficiencies in its own economy, while binding Beijing closer to the rest of Asia. Meanwhile, the United States does not expect to see the first “real outcomes” from the Indo-Pacific Economic Framework (IPEF) until the end of 2023, more than one year after its announcement. IPEF, moreover, lacks the market-access agreements characteristic of other, more substantive economic agreements. It is not surprising, then, that the 2023 Lowy Institute Asia Power Index ranks China 100 out of 100 on its “economic diplomacy” index, while the United States receives a ranking of only 34.6. The 2023 State of Southeast Asia survey similarly shows that only 21.9 percent of respondents view the United States as a leader in championing free trade, down from 30.1 percent in 2022. To be fair, Beijing has significant ground to cover before its markets become as free and as open as those in the United States. What many trade partners care about, however, is not where China and the United States have been, but where they are going. To many, it appears as if Washington is turning inward while Beijing continues to open its markets. This leads to the second error in Jake Sullivan’s “new consensus” on international economic policy. He expresses fatalism about China’s economic trajectory without giving credence to the possibility that China may change, or that the United States can play a role in influencing Beijing’s behavior. Sullivan explains, when “President Biden came into office, we had to contend with the reality that a large non-market economy had been integrated into the international economic order in a way that posed considerable challenges.” In response, Sullivan focuses on building domestic “resilience” and “capacity” to reduce America’s dependence on China. Washington appears to have given up on addressing the non-market practices contributing to U.S. dependence on China in the first place, including state subsidies and dumping. The administration also seems to have forgotten that access to low-priced imports is an important factor in the competitiveness of U.S. firms and the standard of living of American consumers. Fatalism about China’s trajectory tracks with the Biden administration’s overall Indo-Pacific Strategy, which does not seek to “change the PRC but to shape the strategic environment in which it operates.” Fortunately, Treasury Secretary Janet Yellen has bucked the trend by stating that she hopes to “engage” with Beijing “in an important and substantive dialogue on economic issues.” Not trying to influence Beijing, on the other hand, would give up an essential element of any effective China policy. Of course, prior negotiations were by no means unqualified successes. The Trump administration’s “phase one” trade deal largely failed to change Beijing’s behavior, in part, because the bilateral purchase agreements effectively, as Yukon Huang and Jeremy Smith of the Carnegie  Endowment for International Peace put it, “prescribed state-managed trade over market forces.” Other negotiations, however, have seen more success. Former Treasury Secretary Hank Paulson was able to persuade Beijing to revalue its currency by more than 20 percent in the late 2000s, helping to level the trade relationship. China’s WTO accession negotiations also moved the needle on the country’s economic policy. While Beijing failed to carry out many of its WTO commitments, China did reform key aspects of its economy and, notably, slashed its average tariff level from 15.3 percent in 2001 to 9.8 percent over the next decade. U.S. policymakers should learn the lessons of past negotiations rather than standing by as U.S.-China economic relations deteriorate further. One way to pressure Beijing to continue along the path of reform and opening up would be to carry out negotiations in concert with U.S. friends and allies. The Trump administration gave up significant leverage by dealing with Beijing bilaterally, outside the parameters of the international trade system. Plurilateral negotiations with U.S. partners — many of whom share U.S. grievances — may be more effective at convincing China to change course. The consequences of not having an effective economic dialogue with Beijing will become more apparent over time. Despite Washington’s wishes, China is simply not going away. Beijing will continue to join new trade agreements and integrate itself deeper into the global economy, even as the United States focuses on building resilience at home.

With relations at an all-time low, punitive actions targeting China have become politically popular, even if they have no analytical basis. Five years ago, then president Donald Trump launched a tariff-fueled trade war with China designed to reduce the bilateral trade deficit. His successor, President Joe Biden, then added a decoupling focus by restricting high-tech exports and curtailing professional and financial links. Both wanted to reduce imports of manufactured goods and bring home more jobs. How should one judge the effectiveness of their policies? Back then, and even more so today, the logic of Trump’s fixation on trade deficits made little sense. But security concerns have now become the rationale for reducing America’s trade relations with China and undercutting China’s growth potential. Against these yardsticks, the results are mixed but on balance unconvincing, given the costs in the form of inflationary pressures, repressed export growth, and a projected decline in global output. But U.S. politicians from both parties strongly support these restrictive measures because the costs are not obvious to their constituents, while the benefits from appearing to be tough on China resonate well with voters. Rising trade deficits The recent U.S. Census Bureau data indicate that the politically sensitive U.S. merchandise trade deficit with China was larger in 2022 than when Trump became president, while America’s overall trade deficit hit an all-time high of $1.18 trillion. This reinforces the views of nearly all the economists surveyed at the launching of Trump’s trade war: that the tariffs would not reduce U.S. trade deficits and the costs would be paid largely by Americans. For the Trump administration, the wild card was the “phase one” purchase agreement, which called for an increase of $200 billion in China’s imports from the United States. But state-to-state purchase agreements have no logical basis when global trade is largely shaped by the market-driven decisions of firms and consumers and subject to unpredictable events such as the coronavirus pandemic. Economic principles tell us that how much a country saves and spends determines its trade balance. The combination of Trump’s large tax cuts and Biden’s huge expenditure initiatives has led to soaring budget deficits, which are mirrored in record trade deficits. All this has little to do with China. Yet the Biden administration still insists that China honor the purchase agreement and links the removal of tariffs to its fulfillment. Asking China to honor an agreement that made no sense to begin with as a condition for dropping another equally ineffective policy defies logic. Trade diversification but increasing import dependence on other countries But this focus on bilateral trade numbers overlooks the sharp decline in China’s share of trade with the United States. Whereas China accounted for 47 percent of the U.S. trade deficit in 2017, it accounted for only 32 percent last year, with most of this decline offset by the increasing shares of other East Asian economies. Europe’s share of America’s overall trade deficit also declined from 21 percent to 18 percent. Only Canada and Mexico, via the United States-Mexico-Canada Agreement (USMCA), were able to increase their share from 11 to 18 percent. More insights can be gleaned from looking at the components of trade. Although the value of U.S. imports from China was essentially the same in 2022 as it was in 2017, total U.S. imports increased by about $900 billion during this period. As a result, China’s share of the total, made up largely of manufactured goods, fell from 22 to 17 percent. This decline, however, did not reduce America’s dependency on imports of manufactured goods. The share of imports relative to overall expenditures on manufactured goods rose steadily to 34 percent in 2022 from 23 percent two decades ago. The decline in China’s share of U.S. imports of manufactured goods was more than offset by imports from other countries, notably Mexico and Vietnam. These two developing countries, more than others, were able to import heavily from the United States based on their locational advantages and free trade agreements. Vietnam and China share a border and are linked by the ASEAN-China trade agreement, while Mexico and the United States also share a border and are linked by the USMCA trade agreement. Less noticed, however, is the behind-the-scenes role that China plays in supplying the components and materials for these other countries’ exports to the United States. Most of Vietnam’s increased exports were in product lines where U.S. imports from China fell, such as computer accessories and telecommunication equipment. China’s exports to Vietnam have more than doubled since 2017, and its trade surplus nearly tripled by 2022. China’s exports to Mexico increased by nearly 30 percent last year, on top of a 50 percent increase in 2021. China may be exporting less to the United States directly, but it is now indirectly exporting more. This explains why China’s share of global manufacturing production has continued to increase from 26 percent in 2017 to 31 percent in 2021. As for U.S. exports, the total averaged about $1.5 trillion from 2017 to 2020 but then jumped to $1.9 trillion in 2022. But this increase was not in manufactured goods but in exports of energy products and chemicals to Europe, spurred by the Ukraine crisis. The trade war did little to expand U.S. exports to China, the share of which fell from 8.4 percent in 2017 to 7.5 percent in 2022. Costs and benefits of decoupling According to one study, U.S. firms were handicapped by tariff-related higher costs of their imported inputs, and coupled with China’s retaliatory tariffs, this resulted in U.S. exports to China being 23 percent lower than they would have been in the absence of the trade war. The consequence is that America’s trade war policies generated very little growth in exports of manufactured products, despite the priority given to those policies by both the Trump and Biden administrations. If the purpose of the U.S. punitive actions toward China was to weaken China economically, there is no clear evidence of that happening. By developing alternative export markets and tapping pandemic-driven demand in the West for manufactured goods, China pushed its share of global exports to record levels in recent years. Meanwhile, China’s imports as a share of its GDP have been declining steadily, from a high of 28 percent in the early 2000s to 17 percent in 2022. One could argue that the world has become more dependent on China in trade while China has become less dependent on the world. The benefits of decoupling—if any—should be weighed against the costs imposed on U.S. consumers and producers and damage done to the export competitiveness of U.S. firms. To counter such tendencies, the Biden administration is promoting domestic manufacturing with subsidies in the Inflation Reduction Act. Such actions can be justified for strategic reasons, but the rationale is weakened by protectionist Buy America conditions. U.S. policymakers often counter by pointing to China’s use of subsidies to promote strategic industries, but Chinese firms were keen to import key technologies and components to ensure that their products were globally competitive on cost and performance grounds. The recent semiconductor and other U.S. restrictions on China’s access to high-tech products are also problematic because these products are “dual use,” with a much larger commercial market relative to military applications. Such restrictions hurt the many U.S. firms that derive significant revenues from selling to China and may contravene World Trade Organization guidelines. The costs of trade-related distortionary policies can be substantial. One oft-cited study estimates that taxpayers end up paying about $250,000 for each job saved in typical Buy America programs. At a broader level, a recent International Monetary Fund study estimates that a combination of U.S. trade and technological decoupling measures could reduce global GDP by some 7 to 12 percent. Ultimately, the problem lies in the lack of clarity on U.S. policy objectives. What does it mean to undercut China, and how will the United States know if it has succeeded? With U.S.-China relations at an all-time low, punitive actions targeting China have become politically popular, even if they have no analytical basis. The reality is that the United States and China have no choice but to continue trading with each other. But with security overriding commercial considerations, the economic interdependence built up over decades is now being reversed, leaving everyone worse off.

​Although the dollar continues to be the dominant global currency, Russia and China could dent this dominance. In the aftermath of global financial exclusion, Russia has had to make some strategic adaptations. The West’s sanctions had crippling consequences, and the Kremlin scrambled to find alternatives. In light of these developments, China became an important ally, and the Yuan—its currency—has taken on a more prominent role. It is telling that in Russia, the yuan has surpassed the United States Dollar (USD) in trading volume, a feat achieved a year after the Ukraine conflict, which triggered a series of sanctions against Moscow. As Russia and China band together, one wonders what other shifts will take place and how they will shape the future. Change is afoot, and the Russian market bears witness. The month of February saw a watershed moment as the yuan surged past the dollar in monthly trading volume for the first time. The momentum continued into March as the gap between the two currencies widened, showcasing the growing sway of the yuan. It’s an impressive feat, considering that the yuan’s trading volume on the Russian market was once quite insignificant. The winds of change blew through Russia’s financial system as the year progressed. Additional sanctions had taken their toll on the few remaining banks that still held power to make cross-border transactions in the currencies of countries that had been deemed “unfriendly” by the Kremlin. One such bank was Raiffeisen Bank International AG, whose Russian branch played a significant role in facilitating international payments within the country. However, the lender found itself under the watchful eye of both European and US authorities, which only added to the pressure. These events spurred the Kremlin and Russian companies to shift their foreign-trade transactions to currencies of countries that had not imposed sanctions.Converging coalitionsThe bond between Russia and China is growing stronger, with both nations seeking to bolster their positions on the global stage. Their alliance has spread across various spheres: military, economic, and political. With relations between Russia and the West crumbling, China has emerged as a key partner for Russia, providing it with the necessary support to counter economic and political pressure. On the other hand, China is keen on expanding its global reach, especially in the Eurasian region, and sees Russia as an important ally in this regard. President Xi Jinping’s recent visit to Moscow and his pledge to expand cooperation are likely to take this partnership to greater heights. Trade and investment ties are set to grow stronger, with both nations seeking to reduce their dependence on Western economies. Russia’s focus on infrastructure development and mega projects is also likely to benefit from China’s expertise in these areas. Energy is another significant area of collaboration, with Russia being a leading exporter of oil and gas and China being the world’s largest importer of these resources. Technology is also an essential domain, with both countries investing heavily in research and development to remain competitive in the global economy. While the alliance between Russia and China will likely have far-reaching geopolitical consequences, it is a complicated relationship with both nations pursuing their interests, even as they work towards common goals. As a result of Western sanctions, Russia has shifted its foreign trade transactions away from the dollar and euro to currencies of non-restricted countries. By doing so, the Kremlin and Russian companies hope to decrease their dependence on the Western financial system and explore new avenues for conducting their trade and economic activities. This shift in strategy reflects Russia’s determination to maintain its economic stability despite restrictions on its access to the global financial system. It also underlines the growing importance of alternative currencies in global trade as countries strive to minimise the impact of sanctions and safeguard their economic interests.Structural overhaulsThe Russian Finance Ministry was not immune to the winds of change either. Earlier this year, it made the switch from the dollar to the yuan for its market operations. It even went a step further by devising a new structure for the national wealth fund, earmarking 60 percent of its assets for the yuan. The Bank of Russia joined the chorus, urging its people and businesses to consider moving their assets to the rouble or other currencies considered “friendly.” This would help mitigate the risk of having their funds blocked or frozen. As the world undergoes a seismic geopolitical shift, it seems Russia is moving in tandem, searching for ways to secure its economic future. However, the dollar still reigns supreme in the Russian market. Even with all the changes taking place, it remains the most widely used currency, ceding its throne only occasionally to the yuan. This underscores the enduring dominance of the dollar, which has played a significant role in Russia’s financial landscape for years. However, as the world continues to evolve, one wonders how long it can hold on to its crown.

Emmanuel Macron has just completed a state visit to the United States of which everyone, both on the American and French side, is pleased with the success. In the entourage of the French president, it is put forward that it was a state visit, therefore of primary importance in the protocol order. France also highlights that this was the first state visit by a foreign head of state to the United States since Biden's election, demonstrating the good relationship between the United States and France. . But it is always embarrassing to note that European countries systematically boast of being Washington's favorite, when the United States never boasts of maintaining good relations with a European country. This testifies to a recognition, on the part of Washington, of the peripheral status of European countries in relation to the United States. Sumptuous dinner in the gardens of the White House, successful visit to New Orleans to highlight the French-speaking world, celebration of unity against Russia in Ukraine… Some unfortunate subjects were nevertheless on the program, particularly on the economic level. . There was indeed talk of the US plan called the Inflation Reduction Act amounting to 370 billion dollars aimed at supporting the greening of the US economy, which, in the words of Emmanuel Macron, is “hyper-aggressive”. We can only be pleased that the United States is greening its economy. Moreover, at first, the President of the European Commission Ursula von der Leyen congratulated the United States for embarking on such a plan. But very quickly, France, Germany and European countries in general realized that this plan risked having extremely negative consequences on a European industry already in bad shape. Indeed, industrialists, regardless of their nationality, can recover up to 40% of their investment if they invest in the United States or in countries that have free trade agreements with them, namely Mexico. and Canada. The great fear of Europeans, exacerbated by the fact that the continent is already experiencing an economic crisis due to rising energy costs, inflation and an industry that is generally not doing very well, rests on the fact that American industrialists present in Europe can return to the United States to benefit from this aid, and even more so that European industrialists drop their investments in Europe to direct them to the United States. Some big names in European industry, particularly Germany, have already threatened to do so, also because of the extremely attractive cost of energy in the United States. Emmanuel Macron made very strong statements on this subject before his visit. This would have, according to him, allowed him to be heard by the American president. Heard okay, but not sure he was listened to. Joe Biden has indeed said that the United States does not apologize, that he does not apologize. He made no concessions to the demands of European politicians. Emmanuel Macron did not return with any tangible results. In the interview he gave to Le Parisien on Sunday December 4 on the plane that brought him back to Paris, Emmanuel Macron declared that American officials had told him that their objective was not to weaken European industry. If the goal is not this, it could be the result. Let's hope that this trip will have at least made it possible to awaken European consciences in the face of this danger for their economies. Once again, Europeans are lagging behind American decisions. Emmanuel Macron declared that for the moment no European voice had been raised against this American law. He is right, but we must now take action and not be content with good words, as was the case after the AUKUS affair. Joe Biden then assured Macron during a reconciliation meeting in Rome that the Americans would not do it again. France, which had recalled its ambassador to Washington, then sent him back. Not much had happened then. France and Europe cannot simply be satisfied with comforting, even anesthetic words from the Americans if they are not accompanied by concrete gestures and positive results. In reality, the United States defends its national interests, they are right to do so. Not acting in the same way, because divided and paralyzed, it is the Europeans who are at fault. There is not a “Buy European Act” like there is a Buy American Act. China on the one hand, the United States on the other really defend their interests, Europe does not. When France evokes the idea of defending the national interest against the United States, Paris is quickly accused of anti-Americanism. On the other hand, the United States is not accused of anti-Europeanism when it defends its national interest vis-à-vis Europe. Joe Biden is on the way to achieving what Donald Trump wanted to do, but he is doing it slowly. Donald Trump banged on the table, threatened and insulted, Joe Biden speaks in a soft and calm voice and assures Europeans of his friendship. We have often heard that it is time to get out of naivety about Russia or China. It may also be time to do it with regard to the United States because through such legislation they are not treating Europe as an ally. If the transatlantic strategic alliance is undeniable, especially in the face of Russian aggression in Ukraine, the relationship remains, from a commercial and economic point of view, a competition. With this plan, this competition is no longer quite fair from the United States. It is essential to be aware of this in Europe. From a strategic point of view, the Europeans are paralyzed by the Russian military threat, they think that only the United States can defend them against this threat and that it is worth some concessions. But in fact, there is no major Russian military threat to European Union member countries. Indeed, Russia is proving unable to conquer the Donbass as a whole, and fails to control the territories it has illegally annexed. This makes the prospect of an attack on Western Europe difficult to envisage. The Russian military threat is therefore certainly to be put into perspective. It is not a question of doing so regarding the aggressive intentions of Vladimir Putin, but of measuring this threat from a capability point of view. If this military threat is more supposed than real, then this does not imply neglecting European economic and commercial interests to benefit from American protection. Emmanuel Macron therefore issued a warning cry. Now we have to take action.

With China’s rise and Russia’s war, the unipolar moment after the triumph of the West in the Cold War is over. Five scenarios for a new world order. With the invasion of Ukraine, Russia effectively destroyed the European peace order. Now, Europe needs to find ways to contain its aggressive neighbour, while its traditional protector, the United States, continues its shift of focus to the Indo-Pacific. This task, however, becomes impossible when China and Russia are driven into each other’s arms because, if anything, the key to end the war in Ukraine lies in Beijing. China hesitates to be dragged into this European war as bigger questions are at stake for the emerging superpower: Will the silk road be wrecked by a new iron curtain? Shall it stick to its ‘limitless alliance’ with Russia? And what about the territorial integrity of sovereign states? In short: for China, it is about the world order. The unipolar moment after the triumph of the West in the Cold War is over. The war in Ukraine clearly marks the end of the Pax Americana. Russia and China openly challenge American hegemony. Russia may have proven to be a giant with clay feet, and has inadvertently strengthened the unity of the West. But the shift of the global balance of power to East Asia is far from over. In China, the United States has encountered a worthy rival for global predominance. But Moscow, Delhi, and Brussels also aspire to become power hubs in the coming multipolar order. So, we are witnessing the end of the end of history. What comes next? To better understand how world orders emerge and erode, a quick look at history can be helpful.What is on the menu?Over the course of the long 19th century, a great power concert has provided stability in a multipolar world. Given the nascent state of international law and multilateral institutions, congresses were needed to carefully calibrate the balance between different spheres of interest. The relative peace within Europe, of course, was dearly bought by the aggressive outward expansion of its colonial powers. This order was shattered at the beginning of the World War I. What followed were three decades of disorder rocked by wars and revolutions. Not unlike today, the conflicting interests of great powers collided without any buffer, while the morbid domestic institutions could not mitigate the devastating social cost of the Great Transformation.    With the founding of the United Nations and the Universal Declaration of Human Rights, the foundations of a liberal order were laid after the end of World War II. However, with the onset of the Cold War, this experiment quickly ran into a quagmire. Pinched between two antagonistic blocs, the United Nations was in a deadlock for decades. From the Hungarian Revolution over the Prague Spring to the Cuban missile crisis, peace between the nuclear powers was maintained through the recognition of exclusive zones of influence. After the triumph of the West in the Cold War, American hyperpower quickly declared a new order for a now unipolar world. In this liberal world order, rule-breaking was sanctioned by the world’s policeman. Proponents of the liberal world order pointed to the rapid diffusion of democracy and human rights around the globe. Critics see imperial motifs at work behind the humanitarian interventions. But even progressives place great hopes in the expansion of international law and multilateral cooperation. Now that the West is mired in crises, global cooperation is again paralysed by systemic rivalry. From the war in Georgia over the annexation of Crimea to the crackdown in Hong Kong, the recognition of exclusive zones of influence is back in the toolbox of international politics. After a short heyday, the liberal elements of the world order are jammed again. China has begun to lay the foundations of an illiberal multilateral architecture.How will great power competition play out?In the coming decade, the rivalries between great powers are likely to continue with undiminished vigour. The ultimate prize of this great power competition is a new world order. Five different scenarios are conceivable.  First, the liberal world order could survive the end of the unipolar American moment. Second, a series of wars and revolutions can lead to the total collapse of order. Third, a great power concert could bring relative stability in a multipolar world but fail to tackle the great challenges facing humanity. Fourth, a new cold war may partly block the rule-based multilateral system, but still allow for limited cooperation in questions of common interest. And finally, an illiberal order with Chinese characteristics. Which scenario seems the most probable? Many believe that democracy and human rights need to be promoted more assertively. However, after the fall of Kabul, even liberal centrists like Joe Biden und Emmanuel Macron have declared the era of humanitarian interventions to be over. Should another isolationist nationalist like Trump or others of his ilk come to power in Washington, London, or Paris, the defence of the liberal world order would once and for all be off the agenda. Berlin is in danger of running out of allies for its new value-based foreign policy. In all Western capitals, there are broad majorities across the ideological spectrum that seek to up the ante in the systemic rivalry with China and Russia. The global reaction to the Russian invasion shows, however, that the rest of the world has very little appetite for a new bloc confrontation between democracies and autocracies. The support for Russia’s attack on the sovereignty and territorial integrity of Ukraine – values especially smaller countries unwaveringly adhere to – should not be read as sympathy for a Russian or Chinese-led order, but as deep frustration over the US empire. Seen from the Global South, the not-so-liberal world order was merely a pretext for military interventions, structural adjustment programmes, and moral grandstanding. Now, the West comes to realise that in order to prevail geopolitically, it needs the cooperation of undemocratic powers from Turkey to the Gulf monarchies, from Singapore to Vietnam. The high-minded rhetoric of the systemic rivalry between democracies against autocracies is prone to alienate these much-needed potential allies. But if even the West were to give up on universalism of democracy and human rights, what would be left of the liberal world order? Are the great power rivalries that play out in the background of the war in Ukraine, the coups in Western Africa and the protests in Hong Kong only the beginning of a new period of wars, coups, and revolutions?  The ancient Greek philosopher Thucydides already knew that the competition between rising and declining great powers can beget great wars. So, are we entering a new period of disorder? Not only in Moscow and Beijing, but also in Washington, there are thinkers that seek to mitigate these destructive dynamics of the multipolar world through a new concert of great powers. The coordination of great power interests in fora from the G7 to the G20 could be the starting point for this new form of club governance. The recognition of exclusive zones of influence can help to mitigate conflict. However, there is reason for concern that democracy and human rights will be the first victims of such high-powered horse-trading. This form of minimal cooperation may also be inadequate to tackle the many challenges humankind is facing from climate change over pandemics to mass migration. The European Union, an entity based on the rule of law and the permanent harmonisation of interests, may have a particularly hard time to thrive in such a dog-eat-dog world. Not only in Moscow, some fantasise about a revival of imperialism that negates the right to self-determination of smaller nations. This dystopian mix of technologically supercharged surveillance state on the inside and never ending proxy wars on the outside is eerily reminiscent of George Orwell’s 1984. One can only hope that this illiberal neo-imperialism is shattered in the war in Ukraine. The Russian recognition of separatist provinces of a sovereign state have rung the alarm bells in Beijing. After all, what if Taiwan follows this model and declares its independence? At least rhetorically, Beijing has returned to its traditional line of supporting national sovereignty and condemning colonialist meddling in internal affairs. There are debates in Beijing whether China should really side with a weakened pariah state and retreat behind a new iron curtain, or would benefit more from an open and rules-based global order. So, what is this ‘Chinese Multilateralism’ promoted by the latter school of thought? On the one hand, a commitment to international law and cooperation to tackle the great challenges facing humankind, from climate change over securing trade routes to peacekeeping. However, China is only willing to accept any framework for cooperation if it is on equal footing with the United States. This is why Beijing takes the United Nations Security Council seriously, but tries to replace the World Bank and the International Monetary Fund with its own institutions such as the Asian Infrastructure Investment Bank. If Chinese calls for equal footing are rejected, Beijing can still form its own geopolitical bloc with allies across Eurasia, Africa, and Latin America. In such an illiberal order, there would still be rule-based cooperation, but no longer any institutional incentives for democracy and human rights.Hard choices: what should we strive for?Alas, with a view of containing an aggressive Russia, a rapprochement with China may have its merits. For many in the West, this would require an about-face. After all, the recently fired German admiral Schönbach was not the only one who wanted to enlist Russia as an ally for a new cold war with China. Even if Americans and Chinese would bury the hatchet, a post-liberal world order would pose a predicament for Western societies. Is the price for peace really the right to self-determination of peoples? Is cooperation to tackle the great challenges facing humankind contingent on the rebuttal of the universality of human rights? Or is there still a responsibility to protect, even when the atrocities are committed in the exclusive zone of influence of a great power rival? These questions go right to the West’s normative foundation. Which order will prevail in the end will be determined by fierce great power competition. However, who is willing to rally around the banner of each different model differs significantly. Only a narrow coalition of Western states and a handful of Indo-Pacific value partners will come to the defence of democracy and human rights. If this Western-led alliance of democracies loses the power struggle against the so-called axis of autocracies, the outcome could well be an illiberal world order with Chinese characteristics. At the same time, the defence of international law, especially the inviolability of borders and the right to self-defence, are generally in the interest of democratic and authoritarian powers alike. An alliance for multilateral cooperation with the United Nations at its core finds supports across the ideological spectrum. Finally, there could be issue-based cooperation between different centres. If ideological differences are set aside, hybrid partners could cooperate, for instance, in the fight against climate change or piracy, but be fierce competitors in the race for high-tech or energy. Thus, it would not be surprising if the United States were to replace their ‘alliance of democracies’ with a more inclusive coalition platform. Politically, Germany can only survive within the framework of a united Europe. Economically, it can only prosper in open world markets. For both, a rules-based, multilateral order is indispensable. Given the intensity of today’s systemic rivalry, some may doubt its feasibility. However, it is worth remembering that even at the heyday of the Cold War, within the framework of a constrained multilateralism, cooperation based on common interests did occur. From arms control over the ban of the ozone-killer CFC to the Helsinki Accords, the balance sheet of this limited multilateralism was not too bad. In view to the challenges facing humankind, from climate change over pandemics to famines, this limited multilateralism may just be the best among bad options. For what is at stake is the securing of the very foundations of peace, freedom, unity, and prosperity in Europe.