Power transition theory and the rise of China

In his book, World Politics, AFK Organski (1958) first formulated power transition theory and predicted the potential rise of China and its impact on the international security order. About 60 years ago, long before China embarked on its remarkable development path, Organski explained the dynamics of the potential power transition war between the People’s Republic of China (PRC) as a rising challenger and the United States as a declining hegemon in the international system (Organski, 1968: 338–376). He envisaged that the rise of China through its internal development would be “spectacular,” and “the power of China ought to eventually become greater” and “the Western powers will find that the most serious threat to their supremacy comes from China” (Organski, 1968: 361).

Organski’s power transition theory rests on two fundamental observations. The first is that a country’s power stems from internal development. Since development occurs at different rates, nations will rise and fall relative to one another. The second fundamental for power transition theory is that the international system is decisively shaped by the dominant nation, the hegemon. Those occasions in which a rising power overtakes the dominant power are called power transitions. These transitions may be peaceful as in the case of the USA overtaking Britain, when the rising power is satisfied with the global order. In some cases, the power transition may lead to war as when a dissatisfied power, Germany, rose in power vis-à-vis the hegemon, Britain.

Does the rise of China inexorably anticipate the onset of global instability or even a great power war? Today, routine comparisons are made between a rising China with that of Germany over 100 years ago. Organski (1968: 338–376), however, was far more cautious. He suggested that China “is not Germany” and that “other factors [are] involved besides the relative power” of the declining dominant power and a rising challenger (Organski, 1968: 363). The articles in this Special Issue examine these other factors and explore the dynamics of China’s rise vis-à-vis the USA and its allies, seeking to answer the question “is instability inevitable?”

Since Organski conceived power transition theory, several foundational works in the power transition framework have been developed. Organski and Kugler (1980) empirically tested power transition arguments for the first time in the power transition literature and encouraged others to participate in developing power transition theory both theoretically and empirically. Houweling and Siccama (1988) and Kim (1989) joined that endeavor and Kim (1991, 1992, 1996) contributed to the power transition framework by including the alliance factor in the theoretical equation, and developing for the first time an index to empirically measure the challenger’s level of dissatisfaction, one of the key variables in the theory. With his multiple hierarchy arguments, Lemke (2002) extended power transition arguments to regional subsystems in developing continents. DiCicco and Levy (1999) suggest that Kim’s “alliance transition theory” and Lemke’s “multiple hierarchy model” are two important contributions to the “power transition research program” since Organski first developed power transition theory.

Others have participated in the power transition research program by raising interesting research questions. For example, Kugler and Zagare (1990) questioned the stability of nuclear deterrence under the power transition framework. Kim and Morrow’s (1992) game-theoretic model analyzed the risk attitude of the challenger and the defender, and the timing and initiation of power transition war. Werner and Kugler (1996) examined the relationship between the extraordinary arms buildups and power transition conflict. Lemke and Reed (1996) incorporated the democratic peace thesis into a power transition framework. Building on Kadera’s (2001) dynamic modelling technology, Abdollahian and Kang (2008) account for relative power distribution, relative growth rates, and system satisfaction to model conflict and cooperation associated with power transitions.

While power transition theory progressed in academia, it did not receive corresponding attention from policy circles and think tanks in most parts of the world. Only at the turn of the 21st century when the rapid rise of China and its potential impacts on the East Asian regional as well as global security order became the hot issues of the day, did power transition receive attention. Indeed, many East Asia and China related area studies experts and other international relations scholars started to pay attention to power transition theory. Beginning with Tammen et al.’s (2000) application of power transition arguments to the issues of the rise of China, the expansion of the North Atlantic Treaty Organization (NATO), and deterrence and nuclear proliferation, many others in the United States, Australia, Japan, China, Taiwan, and South Korea have been involved in research focusing on the rise of China and its potential impact on the economic and security order (e.g., Chan 2004; Ikenberry 2014; Jeffery 2009; Lim 2015; Ross and Zhu 2008; Sakuwa 2009). As China continues to develop, power transition theory has received new scholarly attention. This Special Issue features a collection of path-breaking works advancing power transition theory while providing a more solid theoretical understanding of China’s rise and its implications for the international political system.

An important aspect of power transition theory is the nature of system stability. Power transition theory like hegemonic stability theory posits that stability and maintenance of the global system comes with hegemonic dominance through power preponderance. For both hegemonic stability theory and power transition theory, challenges to the order lead to instability. According to Organski (1958), instability arises from challenger-hegemon dynamics, not simply the distribution of power in the international system. He defines a challenger as a powerful nation dissatisfied with the global order (Organski, 1968: 364–365). One of the issues explored in this Special Issue regards the source of international system instability.

Organski never used the term hegemon, but his discussion of power preponderance and global leadership reflects the notion of a hegemon. Ironically, Kindleberger (1973) is often credited with being the originator of hegemonic stability theory, but he also never used the term and his theory does not correspond to the ways it is used by Gilpin (1981) or Keohane (1980) (see also Kindleberger (1986)). With regard to maintaining the international economic order, Kindleberger (1973) argues that in times of crisis the dominant power is essential as a lender of last resort, not as a leader steering the global system. Hegemonic stability theory is based on an assumption of state-centric global leadership. Power transition theory through a focus on power exhibits many similarities, but several differences, especially regarding the inevitability of war during a power transition.

Another important point raised by the articles composing this Special Issue is that power transition theory does not fatalistically predict a war between China and the USA. Gilpin’s (1981) hegemonic stability theory, Modelski’s (1978) long cycle theory, and Mearsheimer’s (2014) offensive realism theory make rather pessimistic speculations that a “hegemonic” war or “global” war between the rising challenger and the declining hegemon will eventually occur and that the rapidly rising challenger will become a new leader, restructuring the new international order in its favor. In contrast, power transition theory implies room for maneuver by the statesmen of the declining hegemon and its allies to escape from a cataclysmic war. Gilpin’s (1981) and Modelski’s (1978) theoretical arguments of the rise and fall of the great powers and eventual major wars predict that a rapidly rising China will sooner or later overtake the declining United States in power, and a power transition war between the rising China and the declining United States will eventually occur, resulting in the PRC becoming the new leader of the world. Fortunately, however, the power transition research program suggests that peaceful transition of power between the rising challenger and the declining hegemon is possible and that there may be ways for the declining hegemon to prolong the period of its power preponderance vis-à-vis the rising challenger, so that the rapidly rising power will not dare to challenge the hegemonic leadership.

The power transition research program identifies several independent variables that can explain the likelihood of the power transition war. Among them, power parity between the rising challenger and the declining hegemon, and the challenger’s level of dissatisfaction with the status quo, are considered the two most important variables in the power transition framework. Unlike balance of power theory (e.g., Morgenthau 1973; Waltz 1979), which posits that the balance of power mainly through alignment and realignment among great powers will lead to stability among them, power transition theory contends that power parity will lead to major war. Indeed, power transition theory suggests that the maintenance of power preponderance by the hegemon is likely to prevent major war among great powers, while balancing would be destabilizing.

Given the rise of a dissatisfied power challenging the hegemon, most power transition theorists have argued that the rising power will be the initiator of a war. Organski (1958, 1968) theorized that the initiator would be the challenger prior to a transition, though he did see the possibility for “American hotheads” willing to initiate conflict (Organski, 1968). In general, the power transition literature shows formally and empirically that the defender does not initiate, because of its commitment to the status quo. Levy (1987) theorizes that the declining power will initiate conflict. Empirically, Werner and Kugler (1996) and Kim (1989) show that the challenger is more likely to be the initiator in wars driven by dissatisfaction. Formally, Alsharabati and Kugler (2008) show that the challenger is the initiator. Further, Kim and Morrow (1992) formally demonstrate that the risk-acceptant rising challenger is more likely to challenge the status quo and the risk-averse declining hegemon is more likely to resist to escalate the situation into war. However, Organski and Kugler (1980), and more formally Kim (1991), show that the challenger frequently loses because of a smaller and weaker alliance.

In addition, power transition theory posits that the declining hegemon’s efforts to alleviate the rising challenger’s level of dissatisfaction with the status quo may lower the likelihood of the power transition conflict between the rising challenger and the declining hegemon. Thus, power transition theory predicts that until the PRC’s military capability overtakes that of the United States, major war between the United States and the PRC is not likely. It also speculates that even if the PRC catches up with the United States in power, as long as the PRC is for the most part satisfied with the status quo, major war between them is less likely and that even if the rising China is dissatisfied with the existing regional as well as international order, the United States may be able to alleviate the PRC’s level of dissatisfaction to avoid potential major conflict between them.

Indeed, the PRC has successfully managed to maintain a high level growth rate for almost four decades. Many sources in recent years have suggested that within two to three decades the PRC is likely to become the economic superpower, and that with its military power projection capability, vigorous foreign policy, and efficient policy machinery, the PRC will be the only challenger to the United States-led system (Mearsheimer, 2014). Of course, there are others who argue otherwise. Some suggest that such domestic problems as economic inequality and regional disparity, ethnic minority and self-determination issues, to mention a few, will keep the PRC quite fragile and decelerate its growth rate. Especially in terms of the PRC’s military capability, some speculate that it will still be much weaker than that of the United States (Goldstein 1997; Rapkin and Thompson 2003; Segal 1996; Shirk 2007; Wohlforth 1999).

Leaders and experts in the policy circles and decision-making areas in the United States seem to prepare the future scenarios in which a dissatisfied PRC successfully catches up with the United States in power. The Obama administration in the United States has decided to carry out the “pivot to Asia” policy and to strengthen the existing alliance relationships with its regional allies including Japan and the Republic of Korea (ROK). The United States is strongly encouraging Japan to be a “normal state” and to share a larger military burden, and is trying to introduce the missile defense system in the Korean peninsula. The United States also is working to expand its new security ties with other members in the Asia-Pacific region. With all these efforts of “rebalancing to Asia,” can the United States successfully prolong the period of power preponderance vis-à-vis the PRC? Will the United States pursue its “pivot to Asia” policy consistently in the years to come? Can it successfully introduce the Terminal High Altitude Area Defense (THAAD) system to the ROK? Will its nuclear policy efficiently deter the potential North Korean nuclear threat? All these questions have something to do with the power parity variable in the power transition framework.

Recently, the PRC has expressed its willingness to take initiatives in establishing a new regional order. The PRC has not only demanded greater influence in such institutions as the International Monetary Fund (IMF) and the World Bank but has also led the establishment of the Asian Infrastructure Investment Bank (AIIB) and the potential use of China’s yuan as a reserve currency at the IMF. Some commentators suggest it is part of a pattern that portends a Chinese challenge to America’s position as the system’s dominant power. Other scholars in contrast suggest that the PRC is not a dissatisfied power (Ikenberry 2014; Johnston 2003). Still others suggest that while for the most part satisfied, China is likely to become a dissatisfied power. Should the United States allow a larger share of the economic benefits to the rising PRC? Would it be a good idea for the United States to encourage its regional allies to actively participate in the PRC-led AIIB? Will an increase in economic and trade interdependence between the United States and China, and between its allies and the PRC, be helpful in alleviating the PRC’s potential dissatisfaction with the existing liberal economic order? Or will it even be helpful in lowering China’s dissatisfaction with the existing security order in the system? These questions are related to the dissatisfaction variable in the power transition research program.

Unlike most realist and neorealist theories, which only emphasize the importance of great powers in the international system, power transition theory, especially alliance transition theory, allows us to theoretically account for the role of middle powers. Such a perspective can help us address such questions as: In East Asia what mediating roles can countries such as Australia, South Korea, and Indonesia play to mitigate the potential conflict between the two giants, the United States and China in the years to come? This and the earlier questions are all legitimate questions to answer for peace and stability of the East Asian region as well as the global society. In this Special Issue, many of these questions are addressed.

Carla Norrlof and Simon Reich examine the role of international system leadership in their article, “American and Chinese leadership during the global financial crisis: Testing Kindleberger’s stabilization functions”. Theories of hegemonic stability and power transition have been built on the largely unchallenged assumption that the United States acts as a global economic stabilizer in times of crisis. These theories position China in starkly contrasting roles as either a free-rider or a predator waiting to challenge American leadership in times of crisis. This article constitutes the first attempt to systematically delineate, operationalize, and test whether the United States performs this role as global economic stabilizer, drawing on Kindleberger’s five stabilization functions (Kindleberger 1973). Norrlof and Reich evaluate the extent to which the United States and China have performed these stabilizing functions. They find that China has played a supportive, stabilizing role and that Kindleberger’s functions tend to be shared by the two great powers. Rather than challenging the system, China supports the global economic system in an ever more active manner. Far from being a dissatisfied challenger, China acts autonomously in its own self-interest to maintain the global order.

Sang-Hwan Lee’s article, “Global and regional orders in the 21st century in terms of multi-layered power transition theory: The cases of U.S.-China and China-Japan relations,” deals with double-layered power transition, examining how regional and global power transitions affect one another. Since the beginning of the 21st century, USA-China relations in the global order have been more cooperative than the China-Japan regional rivalry. Lee examines how the two cases of power transition interact. As for the prospects of China overtaking the USA in the near future, Lee contends that this will not happen due to the persistent military and economic gap between China and the USA. The case of a regional power transition from Japan to China in the near future is more likely. Military and economic data show that China is overtaking Japan. This suggests two possible scenarios. One scenario is that the global order dominates the regional order, whereby a stable regional order results. The other scenario is that the regional order dominates the global order, whereby China wages a regional hegemonic struggle against Japan. Lee’s analysis shows that the global order shapes the regional order. Globally stable USA-China relations limit unstable China-Japan regional relations. The implication is that we are likely to witness a peaceful power transition from Japan to China with the United States playing the balancer role in Northeast Asia.

“Rising China, pivotal middle power South Korea, and alliance transition theory” by Woosang Kim further develops alliance transition theory by incorporating the role of a pivotal middle power into Organski’s power transition framework. Alliance transition theory posits that power parity between the dominant power’s alliance and the rising dissatisfied challenger’s camp is likely to lead to major war. A middle power can provide stability in two ways: it can help reinforce the dominant state’s power preponderance over its potential challenger, and it can play a mediating role by helping to make the rising potential challenger more satisfied with the status quo. Alliance transition theory suggests that a pivotal middle power such as South Korea could add to US capabilities and serve to maintain power preponderance over the potential challenger, the PRC.

Kyungkook Kang and Jacek Kugler explore the stability of deterrence in East Asia and the effects of missile defense on the regional security in their article, “Assessment of deterrence and missile defense in East Asia: Power transition perspective”. Drawing on power transition theory, Kang and Kugler examine the implications of developing the US missile defense system in the Asia-Pacific region. They conclude that in the short term, the stability of deterrence in East Asia will be increased through the deployment of ballistic missile defense since it will sustain a condition of power preponderance against potential regional challengers. In contrast, in the long term, the expansion of the missile defense system could lead China to become dissatisfied with the status quo, thereby increasing the risk of a destabilizing power transition. If correct then the arguments made in this article are exhaustive. If they are empirically or formally wrong then the opportunities for deterrence failure are far larger than the ones we have identified. The implications are significant.

Stein Tønnesson’s Review Essay, “Deterrence, interdependence, and Sino-US peace,” also examines the role of nuclear deterrence in the context of the rise of China and power transition, but it also considers the role played by economic interdependence. Those who do research on deterrence rarely cite work on economic interdependence, and vice-versa. Indeed, the two literatures are independent of one another. Bringing together these two divergent literatures, this Review Essay explores the hypothesis that if the USA and China maintain their capacity for nuclear deterrence, and continue to depend on each other economically, the likelihood of power transition leading to a great power war will be minimized. Tønnesson further contends that peace will be reinforced if important third countries, especially Japan, are covered by US extended deterrence, while remaining economically integrated through trade and transnational production networks with both China and the USA.

The final contribution to this Special Issue is a Current Perspectives article by Pavel Baev and Stein Tønnesson, “Can Russia keep its special ties with Vietnam while moving closer to China?” This article examines Russia’s attempts to upgrade its strategic partnership with China as a counter-measure to the West. Such a move, however, is not without risk. Russia could very well become a junior partner to a powerful China, thereby diminishing its ability to influence the international system. This Current Perspectives essay examines how deepening Russia’s security and energy connections with Vietnam could be used to balance China-Russia relations and how it would affect more broadly the relationships between China, the USA and Japan.

The articles composing this Special Issue contribute to several significant aspects of power transition theory and the rise of China. They regard the nature and sources of global system stability, the implications of a rising power, the propensity for war between a challenger and declining power, the sources of system satisfaction or dissatisfaction, the role of middle powers in mitigating conflict, the role of alliances in affecting the nature of power transitions, in addition to the interaction of regional and global power transitions. Each of these debates has direct relevance for understanding the rise of China. Finally, although there has been some research that has “sparked further debate and concerted efforts to generate a better indicator of (dis)satisfaction,” (DiCicco and Levy, 1999: 690), further research is needed to develop a better indicator of the PRC’s level of dissatisfaction. We also hope to see more research on the economic interdependence between China, the USA, and their middle power allies in the region and its impact on the PRC’s level of dissatisfaction, and on other roles of middle power allies in the region.