LAUSR

Abstract Following the central themes of this special forum, this article aims to move beyond binary debates on how China relates to the hitherto dominant US-led liberal order. The most debated outcomes – slipping into a Thucydides trap versus the resilience of the liberal international order – should be seen as two extreme cases that are unlikely to occur. Much more likely is a period with diminishing global leadership – a Kindleberger trap – and a metamorphosis of the liberal order as neo-liberal economics is increasingly infused with neo-statism. Analytically, I utilize a two-level analysis that traces historical processes at the level of the international political economy as well as the Chinese domestic level. China’s emergent form of capitalism, Sino-capitalism, is conceived of as a multifarious force, both neo-statist and neo-liberal. It combines top-down state-centric modes of governance with bottom-up networked modes of entrepreneurship. By using the internationalization of the Chinese Renminbi (RMB) as a case study, I illustrate the dynamics by which Sino-capitalism impinges on the International Monetary System. Sino-capitalism’s interactions with the liberal order are generating a mélange that joins neo-liberalism’s emphasis on private capital and unfettered market forces with a neo-statist reinsertion of government to manage economies. This mélange is likely to be chaotic as the United States becomes selectively isolationist, while China’s support of the existing order remains half-hearted. The developing chaotic mélange indicates that the global capitalist system could increasingly exhibit disorderly, dysfunctional and even dangerous trends.