Normative Power China: Process Tracing the Dynamics Behind the Asian Infrastructure Investment Bank

University essay from Lunds universitet/Statsvetenskapliga institutionen; Lunds universitet/Pedagogik; Lunds universitet/Master of Science in Global Studies; Lunds universitet/Graduate School

Abstract: In the midst of a global shift in world politics induced by the rise of emerging powers, the outdated and unequal international financial institutions (IFIs) that were set up after World War II are increasingly being challenged and scrutinized. International actors can use IFIs in numerous ways to enhance their position in the world system. For instance, they can be used as a vehicle to launder state interests with the ultimate goal of pursuing or enhancing normative power, allowing an actor to define what is considered ‘normal’ in international relations. This thesis seeks to investigate such an example, and analyzes the newly established Asian Infrastructure Investment Bank (AIIB) pioneered by China to shed light on how emerging powers create IFIs to pursue normative power. The main argument is that creating IFIs is ‘sufficient’ but not ‘necessary’ to enhance an actor’s normative power. Grounded in constructivist literature with a focus on ideational factors such as norms, ideas, and values, this thesis uses process tracing to capture the underlying dynamics that played the biggest role in establishing the AIIB. In doing so, it aims to demonstrate how China has imbued the bank with its own norms in the hopes of projecting them out into the world, which ultimately enhances China’s normative power. Material factors including economic gains and improved security will equally be considered in order to properly address the multiple causal pathways that led to the bank’s creation. The findings reveal that the economic aspect of material factors can be ruled out as an alternative explanation, a revelation that induces the likelihood that ideational factors played an important part in the creation of the AIIB. However, the study was unsuccessful at ruling out the security dimension. As such this thesis finds that given the complexity of international actors and that their goals and actions are seldom one-dimensional, ideational factors were important in China’s normative power pursuit, but ultimately both factors played a part in creating the AIIB.

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