Atlantic Council Strategy Paper Series December 16, 2020

Strategic context: The rules-based international system

By Jeffrey Cimmino and Matthew Kroenig

What are the problems that the strategy seeks to address? What are the challenges and opportunities with which the strategy must contend? This section describes the strategic context for a new global strategy for China.

The rules-based international system

The post-World War II, rules-based international system, led by likeminded allies and partners, has produced unprecedented levels of peace, prosperity, and freedom, but it is coming under increasing strain. A foremost challenge to the system is the return of great-power competition with revisionist, autocratic states—especially China.

The rules-based international system was constructed mostly by leading democratic allies at the end of World War II, and was deepened and expanded by many other countries over time. The system is predicated on a set of norms and principles pertaining to global security, the economy, and governance. It consists of: a set of rules encouraging peaceful, predictable, and cooperative behavior among states that is consistent with liberal values and principles; formal institutional bodies, such as the United Nations (UN) and NATO, that serve to legitimize and uphold these rules, and provide a forum to discuss and settle disputes; and the role of powerful democratic states to help preserve and defend the system. In the security realm, the system is characterized by formal alliances in Europe and Asia, in addition to rules that protect state sovereignty and territorial integrity, and place limits on the use of military force and the spread of weapons of mass destruction. In the economic domain, the rules-based system has served to promote an interconnected global economy based on free markets and open trade and finance. Finally, in the realm of governance, the rules-based system advanced democratic values and human rights. The system has never been fixed, but has evolved over time, with major periods of adaptation and expansion at major inflection points after World War II and at the end of the Cold War.

This system succeeded beyond the imagination of its creators and fostered decades of unmatched human flourishing. It has contributed to the absence of great-power war for more than seven decades and a drastic reduction in wartime casualties. In the economic realm, worldwide living standards have nearly tripled as measured by gross domestic product (GDP) per capita, and the percentage of people living in extreme poverty has dropped from 66 percent to less than 10 percent since the mid-1940s. Finally, the number of democratic countries worldwide has grown from seventeen in 1945 to roughly ninety today.

Importantly, this system has benefited the average citizen in the leading democratic states that uphold the system. Global security arrangements have protected their homelands, kept their citizens out of great-power war, and provided geopolitical stability that allowed their national economies to prosper. The international economic system crafted at Bretton Woods in 1944 opened markets and increased trade, thereby bringing consumers more goods and services at lower prices, while creating jobs for millions. Since that conference, global GDP has increased by many multiples, and the same holds true for the income of the average Western citizen, adjusted for inflation. Finally, the expansion of freedom around the globe has been one of the great accomplishments of recent decades. It has protected the open governments in leading democracies, and has granted their people the ability to work, travel, study, and explore the world more easily.

In recent years, however, this system has come under new pressures. Revisionist autocratic powers seek to disrupt or displace the system, while regional powers pursue nuclear and missile programs and terrorism. Populist movements challenge global economic integration. There are increasing questions about the United States’ willingness and ability to continue to lead the system. The COVID-19 pandemic has accelerated these negative trends and unleashed additional shocks to the system. But the greatest threat to this system may come from the rise of China.