International governance system flux

The international system needs the support of the international institution to achieve a relatively stable order. Even though an international institution can be upgraded and replaced, the process might be a long and challenging period of institutional substitution and transformation. In other words, global system changes are often hampered by factors such as the mies and regulations of existing institutions, accumulation of the power of established countries, and the promotion and shaping of current mainstream international practices. From the perspective of actors in international relations, mostly that of nation-states, three scenarios should be given particular attention when promoting the transformation of the international system: (1) consolidation of the financial power, which provides a hard base for other soft initiatives in global governance, such as discourse leadership and institutional guidance; (2) accumulation and nurturing of social capital in international society, which serves as a vital force in increasing momentum and promotes international trust in a broader range of groups and blocs thereby facilitating international cooperation; (3) focusing on the capacity of international institutional innovation, which requires the ability of a country to organize and utilize different resources and the capability to achieve creative integration among multiple ideas and institutional elements. Different institutional systems should be linked together during this process and states should be aware that institutional promotion cannot happen at once but requires much patience.⁷

First, the opportunity of having a possible change in the international system lies in the emergence of international financial crises, which provides legitimacy for transforming the governance system. Crisis or war brings a moment of flux and opportunity for systemic change. However, crises may only be the result of a long-term poorly functioning institution, rather than a profound shift within the international system (Ikenberry, 2001; Mahoney & Thelen, 2009). Furthermore, a gradual, long-term, and subtle institutional change has been building since the 1970s and 1980s, when the United States and Britain's neoliberal ideas

New type of international governance 89 and policies were spreading globally. However, people found that an unregulated market is unsustainable since the economy always is embedded in social relations, and the seemingly self-regulated market economy has been completely dominated by the logic of capitalism. Therefore, society became increasingly fragile leading the country (and the international governance) to supervise the market through redistribution. Consequently, this process has promoted system adjustments in various degrees to protect the welfare of citizens (Polanyi, 2001). However, neoliberalism's institutional option has inevitably encountered a considerable challenge in the first decade of the 21st century, both in the field of domestic and international governance. To be more specific, this challenge became the political and economic background of the international systemic transition and provided an excellent opportunity for the establishment of a new type of international relations. It is precisely because this change occurred under the pressure of international financial crises and gained broad international and domestic public support against neoliberalism that legitimized its status and made it readily accepted by international society. Moreover, since 2008, it has become a common will of international society to relieve the depression caused by economic crises. In addition to the efforts of the IMF, many countries have also made remarkable contributions. For example, the foreign exchange reserves pool, which was established under Chiang Mai's initiative in 2010, has a scale of up to 240 billion U.S. dollars. By contrast, the IMF has made an unwise decision of spending 11 million euros on the Greek rescue plan, which negatively affected the support for other countries, such as Latin America. Therefore, international society has expressed its dissatisfaction with the IMF in solving this crisis, which gradually improved the status of the G20 to replace the G8 in financial governance. The rapid rise of the BRICS countries also encouraged them to bring forward a plan for the readjustment of the share. This plan was rejected by the United States, and the problem of improving the world financial system remained unresolved. In this context, the BRICS countries have to establish a financial stability organization focusing on their own issues, which is both natural and positive under the guidance of inclusive growth and improvement. It is also good news for the whole international financial system and has been widely accepted by countries all over the world. Besides, the crisis has caused a relative decline of the developed Western countries, compared to their non-Western counterparts, and has provided a favorable condition for the BRICS to build a new type of international financial institution.

Second, the change in the stability of the China-U.S.-Russia triangle has brought benefits to China and Russia and provided an essential prerequisite for the joint action of the BRICS countries. In recent years, as the United States and its allies have been implementing the Asia rebalance strategy, the China-U.S. relationship has dropped to its lowest point since the 1980s, which has brought tremendous security pressure on China and put its security environment in unprecedented danger. Of course, this pressure remains inevitable if China wants to develop its existing international system. To overcome the traditional security dilemma, China has been devoted to establishing a new international security system with mutual trust, openness, and transparency. Due to the crisis in Syria and the subsequent global surveillance program PRISM, particularly the Ukraine crisis, the bilateral relationship between Russia and the U.S. has also entered a "freezing point” in history (Feng, 2014). The souring relations between the United States and the other two countries have therefore promoted the partnership between China and Russia, not only in political and military cooperation but also in economic and trade collaboration. In addition to bilateral energy negotiation and the New Silk Road Initiative, the BRICS’s cooperative financial mechanism also plays a significant role in maintaining a good relationship between China and Russia. Some also believe that the current China-Russia honeymoon not only demonstrates their consistent goal in safeguarding national interests, but also their leaders’ strong will, ability, and skill to manage the current China-U.S.-Russia relations. Specifically, any mechanisms, including the New Development Bank and Contingent Reserve Arrangement, serve the same purpose. However, an economic engine, which is also recognized as the most crucial factor in operating this stable triangle, has been overtaken by China. The sustainable development of China's economy created many employment opportunities for the United States and thus avoided the deterioration of China-U.S. relations. As long as China's economic engine operates normally, the China-U.S. relationship will not worsen, and the China-Russia relationship will remain relatively stable, which will provide China a relatively favorable position in this relationship. What needs to be emphasized here is that the goal of China's international strategy, especially its expectations toward a new international institution and system, does not merely refer to the traditional balance of power in politics that has been influenced by national interests. In fact, the ultimate concern of China's diplomatic practices lies in the construction of a new model of major-country relationship and an international system with mutual trust and benefit.

Third is India's rise and its special role in the organization of the BRICS and the construction of a new type of international relations. Among all the emerging powers. India, relying on its unique identity, has made notable contributions to the current changes within the international system and demonstrated the great potential of innovation in international institution reform. India was first to formally propose the strategic initiative of establishing the New Development Bank (NDB). As a rising power, India has expressed its strategic will and consciousness as a significant power, which has been confirmed many times from the history of international relations for more than half a century after World War II. From the Five Principles of Peaceful Coexistence, to the Non-Aligned Movement (NAM), the G20 mechanism, and the current BRICS, India’s active participation is indispensable, demonstrating its strategic will in world affairs. Also, compared with China and Russia, India has a unique and favorable ideological condition in which it has won identity recognition from Western countries as a so-called liberal and democratic country. Therefore, in the so-called "Peaceful and Democratic Region”, as the largest democracy, India can confront the United States, even when it comes to the topic of nuclear weapons. The Western world has accepted India as a family member in terms of political culture and value orientation. Thus, its multicultural acceptance helps the BRICS to improve its transnational identity, strengthening its economic functions, which is conducive to the

New type of international governance 91 collective diplomatic activities of the BRICS. Furthermore, India’s diplomatic thinking is flexible and has been influenced by both its traditional wisdom and British diplomatic culture of power balance (Zhang & Wang, 2013). In this sense, establishing a new model of major-country relationship between China and India also relates to the construction of a new type of international system, and India also plays a decisive role in China's overall major-country diplomacy.

Fourth, achieving a new type of international governance system depends on the BRICS countries' sustainable economic growth and their potential strength. BRICS countries account for 42% (3 billion) of the global population and 28% (16 trillion) of global GDR From 2000 to 2007, the Morgan Stanley Capital International Emerging Markets Index, which is mainly contributed by the BRICS, increased by 270%, while the Developed Markets Index increased by only 12%. According to the Boao Forum report, the world economy grew 3% in 2013, while the economic growth of developed economies, emerging markets and developing economies, and BRICS countries reached 1.3,4.7, and 5.7%, respectively. Among them, China's growth rate achieved 7.7%, followed by India at 4.4%, Brazil at 2.3%, South Africa at 1.8%, and Russia at 1.4%. According to the Organisation for Economic Cooperation and Development (OECD) 2013 report, China and India’s combined economic aggregate in 2025 will exceed the total amount of the OECD member states. The accumulation of hard economic power is the foundation of BRICS’s systemic innovation and soft power breakthroughs. As long as the economic strength of the BRICS countries continues to grow, the gravity of the world economy will continue to shift to emerging economies, increasing their willingness and ability to participate in global economic governance. As a result, the dominance of "Western governance” will be further weakened, and the world order’s transformation will be a reality.