International Organization for Mediation (Iomed): China’s Institutional Statecraft and Parallel Institutionbuilding in Global Governance

Trailović, Dragan (2026) International Organization for Mediation (Iomed): China’s Institutional Statecraft and Parallel Institutionbuilding in Global Governance. In: Squaring the Circle: The New Global Dynamics. Institute of International Politics and Economics, Belgrade, pp. 125-134. ISBN 978-86-7067-373-1

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Abstract

The post–Cold War international order, shaped around the institutionalized dominance of Western-led multilateral frameworks, is facing increasingly pronounced structural pressures due to the rise of new powers. The contemporary international order is undergoing a crisis of global governance, which stems from simultaneous structural changes in the distribution of power but also from the weakening of common rules and norms. Increasingly complex global challenges, combined with the limited capacity of existing institutions to respond effectively, have led to a decline in trust in mechanisms of international cooperation. This crisis became particularly visible after the 2008 financial crisis, as well as in the context of contemporary geopolitical conflicts. The transition from a system in which the United States held a dominant role toward a more multipolar configuration, alongside the rise of new actors such as China, has called into question existing institutional arrangements. Diverging interests among major powers increasingly hinder the achievement of consensus, leading to a weakening of the effectiveness of current international organizations, including the United Nations. In addition, global governance is burdened by significant inequalities, as developing countries often have limited influence in rule-making. Generally speaking, the architecture of global governance is undergoing a period of significant reconfiguration. In such circumstances, there has been an expansion of what Faude and Karlsrud define as “low-cost” institutions, such as numerous informal intergovernmental organizations (G20, BRICS, AUKUS, and others), which enable states and other actors to act quickly and achieve goals that formal organizations cannot fulfil. In this sense, there are views according to which these “low-cost” institutions represent a necessary update of the global governance system, where a “post-American” order is gradually being created—one that takes into account other powers such as China, for example, thereby achieving greater inclusiveness, where non-Western powers and non-state actors have a voice (Faude & Karlsrud 2025, 114–115; 117–123). Although the existence of these mechanisms partially alleviates functional gaps in international cooperation, it simultaneously indicates a decline in the fundamental ambition of global governance as a universal and binding order. Instead of a unified system of rules, there is an increasingly pronounced fragmentation of the international institutional architecture, with the parallel existence of different, sometimes competing, norms and governance mechanisms (Stephen 2025, 153–154). Within this broader transformation, China has emerged as a particularly significant actor, one that has moved beyond passive participation in existing international institutions and turned toward the active construction of new ones. What has changed in the era of Xi Jinping is not only ambition, but also capacity, as China today possesses the material and institutional resources to move from articulating an alternative vision of the global order to its practical institutionalization. A persistent debate in the international relations literature concerns the fundamental character of China’s engagement with the international order. One strand of scholarship portrays China as essentially a status quo power, one that has benefited enormously from the existing liberal international order and therefore has strong incentives to preserve it. From this perspective, China’s growing multilateral engagement reflects a process of socialization into established norms and institutions rather than a challenge to them. A competing strand, however, characterizes China as an increasingly revisionist power, one that seeks to reshape the international order in line with its own values and interests, potentially challenging or undermining elements of the rules-based system. Neither characterization, however, captures the full complexity of China’s actual behaviour. China has not sought to exit or openly dismantle existing international institutions. It remains an active participant in the United Nations system, the World Trade Organization, and a wide range of multilateral frameworks. At the same time, it has demonstrated a clear willingness to challenge specific rules, norms, and decisions that it regards as contrary to its interests. The most visible expression of this was its outright rejection of the Permanent Court of Arbitration ruling in the South China Sea case. What emerges from this pattern is not the behaviour of a power committed either to preserving or to overturning the existing order in its entirety, but rather a selective and pragmatic strategy that combines engagement, reform, and the construction of alternatives. It is against this backdrop that China increasingly applies a sophisticated combination of institutional engagement within existing regimes and the selective construction of parallel institutions, an approach that the international relations literature variously labels “contested multilateralism” (Morse & Keohane 2014), “opportunistic multilateralism,” (Kastner, Pearson, & Rector 2020), “institutional balancing” (He 2008), and “institutional statecraft” (Ikenberry & Lim 2017). From the Asian Infrastructure Investment Bank (AIIB), through the Shanghai Cooperation Organisation (SCO), to the Belt and Road Initiative (BRI), Beijing is implementing a strategy of building parallel institutions that simultaneously complement and gradually reshape the existing order. In the Chinese context, institutional statecraft encompasses Beijing’s growing capacity and willingness to act not only as a rule-taker within existing institutions, but as a rule-maker through the construction of new ones. This shift reflects a broader evolution in Chinese foreign policy from a posture of cautious engagement to one of confident institutional entrepreneurship. China, as a “dissatisfied state”, increasingly pursues its objectives by creating alternative institutional venues rather than by openly challenging or exiting existing ones. This strategy allows China to expand its normative and procedural influence while maintaining a posture of multilateral legitimacy. Parallelism does not imply replacement; new institutions may replicate, complement, or incrementally contest existing arrangements without seeking to dismantle them.

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