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Universidade Autónoma de Lisboa
e-ISSN: 1647-7251
VOL. 16, Nº. 2, TD1
Thematic Dossier - Emerging Powers In-between
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IS IT POSSIBLE TO EXPLAIN CHINA'S ROLE IN REGIONAL ORGANISATIONS
WITH WORLD SYSTEM THEORY?: SHANGHAI COOPERATION ORGANISATION
FERDI GÜÇYETMEZ
ferdigucyetmez26@gmail.com
University of Bern (Germany), 0000-0003-1204-2606
TUĞÇE PULURLUOĞLU
tugcepulurluoglu@gmail.com
Nanjing University (China), 0000-0002-6619-3752
Abstract
This study examines the rise of modern China and its behaviour in the international system
within the framework of World System Theory. China has experienced fundamental
transformations in its economic, social and political structures with its post-1978 reform and
opening-up policies and has become a rising power in the international system. While the
World System Theory provides a powerful analytical framework to explain the hierarchical
relationships among centre, semi-periphery and periphery countries, how effective is this
theory in explaining a dynamic and rapidly changing actor like China? This article argues that
the World System Theory can still explain the rise of modern China and its behaviour in the
international system. The research analyses China's role in regional organisations, using the
example of the Shanghai Cooperation Organisation (SCO), and how this affects the
international system. In this context, it addresses the limitations of World System Theory in
explaining modern China's behaviour.
Keywords
World System Theory, China, Shanghai Cooperation Organisation, Centre-semi-periphery-
periphery.
Resumo
Este artigo analisa a ascensão da China moderna e o seu comportamento no sistema
internacional no âmbito da Teoria do Sistema Mundial. A China passou por transformações
fundamentais nas suas estruturas económicas, sociais e políticas com as suas políticas de
reforma e abertura pós-1978 e tornou-se uma potência emergente no sistema internacional.
Embora a Teoria do Sistema Mundial forneça um poderoso quadro analítico para explicar as
relações hierárquicas entre os países centrais, semiperiféricos e periféricos, quão eficaz é esta
teoria para explicar um ator dinâmico e em rápida mudança como a China? Este artigo
argumenta que a Teoria do Sistema Mundial ainda pode explicar a ascensão da China moderna
e o seu comportamento no sistema internacional. A investigação analisa o papel da China nas
organizações regionais, utilizando o exemplo da Organização de Cooperação de Xangai (SCO),
e como isso afeta o sistema internacional. Neste contexto, aborda as limitações da Teoria do
Sistema Mundial para explicar o comportamento da China moderna.
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VOL. 16, Nº. 2, TD1
Thematic Dossier - Emerging Powers In-between Global and Regional Organizations
December 2025, pp. 84-105
Is it Possible to Explain China's Role in Regional Organisations with World System Theory?:
Shanghai Cooperation Organisation
Ferdi Güçyetmez, Tuğçe Pulurluoğlu
85
Palavras-chave
Teoria do Sistema Mundial, China, Organização de Cooperação de Xangai, Centro-
semiperiferia-periferia.
How to cite this article
Güçyetmez, Ferdi & Pulurluoğlu, Tuğçe (2025). Is it Possible to Explain China's Role in Regional
Organisations with World System Theory?: Shanghai Cooperation Organisation. Janus.net, e-
journal of international relations. Thematic Dossier - Emerging Powers In-between Global and
Regional Organizations, VOL. 16, Nº. 2, TD1, December 2025, pp. 84-105.
https://doi.org/10.26619/1647-7251.DT0525.5
Article submitted on 16th April 2025 and accepted for publication on 01st September
2025.
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VOL. 16, Nº. 2, TD1
Thematic Dossier - Emerging Powers In-between Global and Regional Organizations
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Is it Possible to Explain China's Role in Regional Organisations with World System Theory?:
Shanghai Cooperation Organisation
Ferdi Güçyetmez, Tuğçe Pulurluoğlu
86
IS IT POSSIBLE TO EXPLAIN CHINA'S ROLE IN REGIONAL
ORGANISATIONS WITH WORLD SYSTEM THEORY?: SHANGHAI
COOPERATION ORGANISATION
FERDI GÜÇYETMEZ
TUĞÇE PULURLUOĞLU
Introduction
1
The fast-moving globalisation process was based on the assumption that rich countries
would focus on high-value-added activities - especially design, R&D (Research and
Development) and management - while low- and middle-income countries would
undertake production processes. However, over time, manufacturing countries also
started to learn high-level activities such as design, technology development and brand
creation. Thus, the functional distinction between the centre and the periphery became
increasingly blurred.
Countries that specialised in the lower rungs of the supply chain began to deepen their
positions and climb towards the system's upper levels. On the other hand, countries in
the centre started to lose their innovation power due to high costs, bureaucratic
bottlenecks and labour shortages. One of the main misconceptions of this situation was
the assumption that production based on cheap labour would provide a sustainable
competitive advantage. However, in the long run, this model suppressed rather than
encouraged local innovation and weakened the competitiveness capacity of the centre
countries.
The rise of China has posed a significant challenge to this structure. Initially taking the
role of the ‘world factory’, China has not only confined itself to labour-intensive
manufacturing but has also begun to enter domains monopolised by the central countries,
such as technological learning, innovation, and design. Therefore, China has become a
hybrid actor capable of exerting influence at both lower and upper levels of the supply
chain. This situation diminishes the rigidity of the centre-periphery divide and even
indicates that in some areas, peripheral countries may have the potential to advance
inherent within the system. The case of China is not merely a story of ascent but also
signifies a structural rupture that questions the fundamental workings of the World
System.
1
In this study, Chat-Gpt was used for the translation of Chinese sources.
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Is it Possible to Explain China's Role in Regional Organisations with World System Theory?:
Shanghai Cooperation Organisation
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87
Modern China has significantly reshaped its role on the global stage over the past four
decades, establishing itself as a major player in international politics. In 1978, economic
reforms and opening-up policies initiated under Deng Xiaoping's leadership positioned
China at the centre of the world system as a swiftly growing economic power. This
transformation extended beyond economics; China's political, cultural, and military
strategies were also overhauled. China's rise has garnered considerable attention due to
its strategic and geopolitical policies. It has begun to dominate different regions
worldwide through new political influences, from Africa to the Arctic and from Latin
America to the Middle East. Examples include mining agreements in Africa, military bases
or observer status in the Arctic Council, infrastructure investments in Latin America, port
agreements, and 5G infrastructure networks. Today, as the second-largest economy
globally (Fang & Nolan, 2019), China plays a crucial role in constructing a multipolar
global order. Its influence on regional and global power dynamics has sparked renewed
discussions about the traditional centre-periphery relations in world politics.
In this context, World System Theory provides a widely used framework for analysing
economic and political relations among countries. Its theoretical approach, originally
developed by Immanuel Wallerstein, explains the world power structure through the
relationships between centre, semi-periphery and periphery countries. World System
Theory has traditionally been framed from an ethnocentric European perspective and has
accounted for the asymmetrical structures of the developing world and the workings of
capitalism in a globalised world. Yet the emergence of a fast-evolving, powerful actor like
China calls into question the fundamental assumptions of this theory. Specifically, how
does the evolution of economic, social and political systems in China differ from the
practice and historical perspectives of the theory?
Indeed, the World Systems Theory offers a compelling analysis of the inequalities
between core countries, the constraints on development in semi-peripheral nations, and
the colonised status of peripheral countries. However, this theory faces challenges in
understanding the rapidly evolving global relations and the strategic directions of
dynamic actors. While China has historically been classified as a ‘peripheral’ or ‘semi-
peripheral’ country, in the last quarter-century it has positioned itself as a power close
to the centre, even transforming the nature of this structure by introducing alternative
models that challenge the dynamics of the existing core structure in certain areas (e.g.,
production, technology, and infrastructure investments). China's rise extends beyond its
economic size to encompass its role as a military power in the South China Sea, a
diplomatic influence in Europe and Eurasia, and a cultural and economic force in Africa.
Its global initiatives, such as the ‘Belt and Road Initiative’ or the ‘Arctic Silk Road’,
challenge the hierarchical frameworks proposed by the World Systems Theory and reveal
a new form of global interaction.
It can be claimed that China's global projects aim to create a new centre in the world
economy. These projects aim to deepen China's outward-looking economic strategies and
global orientations, while expanding China's international sphere of influence. With the
Belt and Road Initiative, China seeks to gain more influence in the world system, while
simultaneously creating an alternative to the traditional Western-centric world order.
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However, the question is whether China's use of its strategic position in the regional and
global projects is enough for it to do so and whether it will change its recognition of
related goals in its global projects and its position in the global system. Through World
System Theory, when discussing China's role in regional organisations, it should be
viewed as a transformational process that inquires into the existing world order. We can
develop an understanding of the long-term evolution of the capitalist world economy
through this framework.
China's engagement in regional institutions like the Shanghai Cooperation Organisation
(SCO) showcases its attempts to shape international architecture. It is helpful to analyse
the Shanghai Cooperation Organisation on its own terms both for its security,
economic cooperation and diplomatic relations goals for China in the region but also
for what they signal about China’s conception of the global order and the role it wants to
play in it.
It is important to note that regional organisations are not merely platforms designed to
conform to the interests of China alone, because the very frameworks shape a new
environment that redefines power relations in global politics. China leverages its influence
within regional organisations to tilt the balance of power in its favour in the global order.
Given this, analysing China’s regional cooperation and global projects becomes highly
crucial for understanding not just the rise of China but also the new structure of power
in world politics.
We are interested in discussing whether China’s global projects are contributing to
regionalisation
2
in world politics and whether they represent China’s endeavour to
develop its own spheres of influence in that respect. This vibrancy of Chinese Foreign
Affairs not only strengthens China's national interests in regional organisations but also
constructs the regionalisation process of world politics. China’s vision of regional
cooperation is not just regional but a global power centre, placing its leadership at its
centre.
In conclusion, this study aims to discuss the limitations of World System Theory in
understanding China's rise and international behaviour and to provide a new perspective
for dynamic and changing actors. China's rise is not only limited to economic growth but
is also shaping world politics through its strategic orientations in international relations.
Although the World System Theory provides a framework to explain China's rise, the
methods of analysis offered by the theory prove to be insufficient in understanding the
place of a dynamic and rapidly changing actor. In this context, this study aims to provide
a new perspective on the theory in understanding China's rise and its place in the world
system.
2
The word ‘regionalisation’ here refers to the organisation of global political and economic relations around
smaller, region-centric structures. The network of relations that China has established in certain geographies
through instruments such as the Belt and Road Initiative, infrastructure investments and trade agreements,
while encouraging this regionalisation, is also considered as part of China's strategy to establish influence, set
norms and propose alternative arrangements in these areas.
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Examination of the Concepts of Centre, Semi-periphery and Periphery
Immanuel Wallerstein defined the world system as ‘a historical system with a definite
beginning and end, defined by geographical boundaries’ (Wallerstein, 2000, cited in
Williams, 2013, p. 202). This definition reveals Wallerstein's emphasis on the decisive
role of historical events and processes in his approach to the social sciences. Wallerstein
defined himself as a historical social scientist, and in this context, he built his analyses
on broad historical perspectives. In particular, the historical approach of the French
Annales School and the works of Fernand Braudel were among the main influences on
Wallerstein's world systems theory. Wallerstein, influenced by Braudel, included not only
leaders and great events in his historical analyses, but also the lives of ordinary people,
economic processes and social structures (Braudel, 1972; Malhut, 2011: 205-214).
According to Wallerstein, the modern world system emerged in Western Europe in the
late 15th century (Ness & Cope, 2021). This transformation is associated with four
fundamental structural collapses that Western Europe faced in the same period: the
decline in the power of feudal suzerains, the weakening of centralised states, the
questioning of the authority of the Church and the collapse of the Mongol Empire
(Wallerstein, 1974). These collapses upset the political and economic balance in the
region and created a favourable environment for the development of capitalism. The
dissolution of the feudal order led to the transformation of production relations and the
emergence of the capitalist mode of production, while the decline in the authority of the
Church allowed the rise of secular and market-oriented economic systems.
This new economic order became intertwined with the modern interstate system.
However, Wallerstein saw the relationship between capitalism and the interstate system
not only as a relationship of complementarity, but also as an interaction full of
contradictions. The armed conflicts caused by interstate competition and the economic
costs of these conflicts had a direct impact on the functioning of the capitalist system.
The conflicts in Europe, especially in the 16th and 17th centuries, led to a slowdown in
capital accumulation and diverted resources to military expenditures. However, such
contradictions are critical for understanding how the capitalist system has survived
institutionally and structurally (Wallerstein, 1983; Arrighi, 1994).
Hegemonic Cycles and Collapse in the World System
According to Wallerstein, the stability and continuity of the capitalist system depend on
the existence of a hegemonic power. Hegemony is a situation in which a particular state
leads the world market by achieving economic, commercial and financial superiority.
However, this leadership is not limited to economic advantages; it also includes political
and cultural dominance. The hegemonic power consolidates its economic supremacy by
gaining control of global trade routes and dominating financial sectors. At the end of this
process, the hegemonic state combines its superiority in the fields of production, trade
and finance to become a power that directs the international system (Arrighi, 1990).
Three major hegemonic powers are identified in the history of the modern world system
(Babones & Chase 2012): the Netherlands, Britain and the United States of America.
These states achieved their hegemonic position as a result of protracted wars (commonly
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90
referred to as the Thirty Years' War). The first was the Thirty Years' War between 1618
and 1648. These wars resulted in the Netherlands gaining superiority over the Habsburgs.
In this period, the Netherlands controlled global trade routes and provided leadership in
the financial sector through innovative instruments (Wallerstein, 1984). The second was
the Napoleonic Wars, which took place between 1792 and 1815. In this period, Britain
triumphed against French interests by utilising its economic superiority, supported by the
Industrial Revolution. Finally, the world wars between 1914 and 1945 led to the
emergence of the United States of America (USA) as the hegemonic power. In this
process, the US led the global order with both its production capacity and its control over
the financial system (Silver & Slater, 1999).
The leadership of hegemonic powers usually has a limited lifespan. According to
Wallerstein, hegemonic states cannot sustain their economic and political advantages
indefinitely. The balance of power mechanism, as an inherent phenomenon of hegemonic
processes, provides opportunities for other states to rise. In this process, hegemonic
powers try to impose their cultural dominance to consolidate their position and increase
their legitimacy. Although language, religion and other cultural elements are among the
tools of this hegemony, the transfer of science and social science paradigms to peripheral
and semi-peripheral countries has a more lasting effect. Such hegemony implies not only
economic and political, but also intellectual and ideological leadership (Wallerstein,
2004).
Applicability of the Theory in the Emerging Powers Context
One of the questions we need to ask before entering the subject is whether Wallerstein's
theory of world-systems remains valid in the context of rising powers in today's
international system. Since the origins of this theoretical approach go back to
geographical discoveries, it is important to identify historical points. From this
perspective, it may be easier to focus on the post-WTO period in the global system. When
we look at the last thirty years of the global system, countries such as China, India, Brazil
and South Africa are in a process of transition from the semi-periphery to the centre.
Their economic growth rates, production capacities and commercial activities can be
considered as indicators of structural changes in the world-system (Arrighi, 2007). For
example, China's influence in the global economy can be observed not only through the
increase in its production capacity but also through its investment policies and soft power
influence in regions such as Africa and Asia. This confirms Wallerstein's predictions about
the dynamics of the transition to the centre.
However, the movement of rising powers towards the centre also creates new
contradictions and rivalries. In particular, existing centre powers such as the US and the
EU use instruments such as trade policies (Rojo, 2023), technological embargoes and
regional alliances to balance this rise. In this context, Wallerstein's concepts of balance
of power and hegemony provide a critical framework for understanding the dynamics of
the international system (Huang & Patman, 2013). Moreover, technological changes and
the rise of the digital economy are accelerating the transitions in the world system and
reshaping the development strategies of semi-peripheral countries (Chase-Dunn, 2014).
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Wallerstein's theory also emphasises the importance of cultural hegemony and
ideological leadership in these transitions. Rising powers are increasing their influence
not only in the economic and commercial spheres but also in global cultural production
and scientific progress. For example, China's rapid rise in the field of technology and the
‘Belt and Roadinitiative aim to create not only economic but also cultural and political
influence (Silver, 2020). This situation reveals the new dimensions of hegemony
struggles envisaged by Wallerstein in his system theory.
Hegemonic Cycles and Collapse: Creative Destructions
After discussing the applicability of the theory in the light of specific case studies, we
conclude that new dynamics are emerging in the current international system, such as
hegemonic transformations, the decline of great powers, the rise of new powers and
creative destruction. The leadership of hegemonic powers usually has a limited lifespan.
According to Wallerstein, hegemonic states cannot sustain their economic and political
advantages indefinitely. The balance of power mechanism, as an inherent phenomenon
of hegemonic processes, provides opportunities for other states to rise. However, this
process brings not only the loss of hegemony but also the emergence of new powers.
Joseph Schumpeter's concept of ‘creative destruction’ (Schumpeter, 1942) provides an
important explanatory framework in this context. The collapse of the old hegemonic order
often results in the rise of a new order, supported by new technologies, economic models
and political structures (Schumpeter, 1942).
For example, the hegemony gained by Britain in the 19th century through the Industrial
Revolution was underpinned by an economic and technological transformation. However,
this hegemony declined as production advantages eroded and rising powers such as
Germany and the USA increased their industrial capacity (Silver, 2020). Likewise, the
American leadership of the mid-20th century rested in part on financial and technological
preeminence in the postwar era. Yet today, China's rapid ascent toward new frontiers in
the digital economy, technology, and green energy is a modern example of creative
destruction (Silver, 2020).
The kaleidoscope of creative destruction allows new forces to arise and replace the void
of the old order that was unravelling. This process, in addition to reshaping the balance
of power economically and politically, translates into struggles for the leadership of the
cultural and ideological struggle. The theory of hegemony expounded by Wallerstein
constitutes a powerful tool to explain those transformations. In the face of the old
hegemonic powers seeking to compensate for their waning economic advantage with
cultural hegemony, the new powers filled the space created by technological and
commercial innovation. Consequently, Creative destruction contributes both to structural
transformations in the capitalist world system and to its self-reproduction. If creative
destruction results in the integration of new technologies, actors or modes of production
within the system, this serves the stabilisation of the system, because a renewal of the
existing order takes place. However, if creative destruction causes existing institutions,
norms or balances of power to become unsustainable - such as the weakening of
hegemonic powers or the emergence of new actors with radical demands - then a process
of change or transformation begins in the system.
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In this sense, the World-Systems Analysis of Immanuel Wallerstein is not only capable
of explaining the overall processes of history but also of moving towards a framework for
analysing the dynamics of the structure of the modern international system (Huang &
Patman, 2013). One concept in particular, which actually extends across all four models,
is that of creative destruction, which coincides with Wallerstein's hegemonic cycles, and
that helps us purport the connection between the fall of old powers and the rise of new
ones. Today, the rise of powers is therefore not only reflected in their tangible
advantages over others but also in the way they exercise sovereignty in the cultural and
ideological domains.
The relevance of the theory is that it demonstrates that great catastrophes are not merely
the final word but also a new chapter. The modern world system has been restructured
through such creative destruction throughout history, and with it, a new order has been
created. The part taken by China, India and other ascendant powers rates as an updated
chapter of historical cycles of hegemony. Wallerstein’s framework continues to offer a
legitimate and useful theoretical basis for explaining such changes. As long as the rise of
rising powers within the system takes place within the institutions and rules of the
existing centre, the stability of the world system is preserved, since the way the system
functions continues even if the balance of power changes. The rise of China, for example,
serves this stability as long as it is compatible with the institutions of neoliberal
globalisation. However, when these powers question the structure of the existing centre
by proposing new norms, institutions and regulations, this leads to a transformation of
the system. China's efforts to build alternative financial institutions (such as the AIIB) or
digital infrastructure norms are examples of the latter category.
China's Economic and Political Rise: A Challenge to the World System?
Different perspectives on the consequences (e.g., business, foreign policy) of China’s
integration into the world system are discussed (Kızılaslan, 2023). Some realist theorists
claim that the rise of China will result in a hegemonic conflict between the US and China,
and the US perceives this process as a threat (Mearsheimer, 2019). The liberal view
contends that China is already part of the global system in the form of free trade and
economic interdependence and that the forces of cooperation in this process can be
managed (Keohane & Nye, 2011). In stark contrast, critical theories regard China’s rise
as not merely an issue of economics and politics, but rather the establishment of a new
balance of power to counter-hegemonic ideological and cultural power (Silver, 2020).
China's economic and political rise represents a significant transformation process in the
world system. While Wallerstein's hegemonic cycles consider China's rise as a natural
evolution of the system, Schumpeter's concept of creative destruction shows that this
process is supported by innovative economic models. China's future role will depend on
the flexibility of the current global order and how the competition between the US and
China is managed. This process will be shaped not only as an economic power shift but
also as a struggle for ideological and cultural hegemony.
China's place in the global economy and politics has been shaped through various stages
throughout history. The Silk and Spice Routes started from China and extended through
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Anatolia and the Mediterranean to the interior of Europe, through which China played an
important role in the trade of goods such as silk, spices, precious jewellery and paper
(Frankopan, 2015). However, geographical discoveries from the 16th century onwards
led to the loss of the importance of land trade routes as sea routes became more
advantageous (Brook, 2010). As a result, China's economic power gradually declined,
and the country began to decline in the global trade system. With the onset of the
Industrial Revolution in Europe (Babones & Chase, 2012), the shift of production to
mechanised industry led to a change in global trade networks, and China lost its
competitiveness against the industrialised West (Pomeranz, 2000).
China's economic decline also had major political repercussions. The Opium Wars (1839-
1842, 1856-1860) revealed China's weakness in the global system and its vulnerability
against foreign powers (Fairbank & Goldman, 2006). As a result of these wars with
Britain, China was forced to sign the Treaty of Nanking in 1842, ceding Hong Kong to
Britain and opening its ports to Western powers (Spence, 1990). Similarly, the Sino-
Japanese War of 1894-1895 symbolised China's loss of regional dominance and the rise
of Japan in East Asia (Vogel, 2011). Following this war, China's sovereignty over Taiwan
came to an end, and Japan gained a clear dominance over Chinese territory (Meisner,
1999). These developments caused China to remain in the background in world politics,
and the country was increasingly dragged into internal turmoil under the influence of
imperialist states.
In 1912, as a result of the Wuchang Uprising, the Qing Dynasty was overthrown, and the
Republic of China was established (Garnaut, Song & Fang, 2018). However, this transition
process failed to stabilise China, and economic, political and social problems deepened
(MacFarquhar & Schoenhals, 2006). Within the newly established Republic of China, the
increasing influence of the Communist Party and its political conflicts with the
Kuomintang further increased the instability of the country (Baum, 1996). Chinese
domestic politics became an arena of conflict between different political groups supported
by the US and the USSR, which led to serious instability in the country (Nathan, 1990).
Japan's invasion of Manchuria in 1931 once again showed China's weakness in the face
of external threats. When Japan declared war on China in 1937, the Communist Party
and the Kuomintang government suspended their civil wars and formed a common front
against Japan (Vogel, 2011). However, this unity came to an end after World War II, and
civil war flared up again in China. In 1949, the Communist Party led by Mao Zedong won
the civil war and established the People's Republic of China (Shirk, 1993).
The Mao period (1949-1976) was characterised by China's closed economy and
authoritarian rule. Mao's economic policy focused on centralised planning based on heavy
industry under state control, and foreign trade was limited (Meisner, 1999). Mao's
Cultural Revolution (1966-1976) and Great Leap Forward policies were implemented with
the claim of strengthening the Chinese economy, but led to major economic setbacks
and social crises in the country (MacFarquhar & Schoenhals, 2006). During the Cultural
Revolution, millions of people were arrested on political charges or forced labour and
economic development was severely hampered (Fairbank & Goldman, 2006). By the end
of this period, China increasingly lagged behind the Western world economically and
remained outside the world trading system.
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Effects of the Reform and Opening-Up Process on the Global World
System
The death of Mao Zedong in 1976 is widely regarded as a significant turning point in
China's modern history. Although the nation had made progress and strengthened its
position since 1949, it continued to face issues of poverty and underdevelopment.
Concerns such as food security and notable disparities in living standards, particularly in
comparison to regions like Hong Kong, South Korea and Taiwan, posed substantial
challenges to the CPC's governance and policies (Garnaut, 2018). Acknowledging the
urgent need for change, the leadership sought to formulate policies to reshape the
country's future, culminating in the groundbreaking Reform and Opening-Up initiative of
1978.
Focusing on economic growth rather than ideology, Deng implemented market reforms
and started to integrate China with the global economy (Vogel, 2011). Deng viewed
reform as an essential pathway to ensure the country's long-term prosperity, and
following the Third Plenary Session of the 11th Central Committee, he managed to secure
broad support within the CPC for his liberalising agenda. His vision of "Socialism with
Chinese Characteristics" emphasised economic modernisation, a revised development
strategy, and a comprehensive reform of China's economic structure and the state.
The initial wave of reforms was concentrated in rural areas, beginning with the de-
collectivisation of agriculture, which resulted in a significant enhancement of productivity
and an improvement in rural livelihoods (Liu & Wang, 2008). Over time, these reforms
were expanded to encompass urban and industrial sectors, progressively incorporating
market mechanisms. Foreign investment was encouraged, private property was allowed
to expand in certain areas, and China's participation in world trade was accelerated
(Baum, 1996).
Moreover, initiatives such as the establishment of Special Economic Zones (SEZs),
notably those in Shenzhen and Zhuhai, played a pivotal role in attracting foreign direct
investment by offering favourable conditions for foreign investors, including tax
incentives, simplified administrative procedures, and improved infrastructure. These
SEZs functioned as experimental arenas for market-oriented economic policies, thereby
enabling China to integrate with the global economy without compromising its political
ideology (Tantri, 2013). This strategic approach fostered China's economic
modernisation, facilitated technology transfer, and enhanced exports, contributing
significantly to its rapid economic growth (Stoltenberg, 1984). Thanks to these reforms,
China's economic growth rate has increased rapidly since the 1980s, and the country has
become a centre of global production and trade. However, during this process, the
authoritarian rule of the Chinese Communist Party continued and political reforms
remained largely limited (Shirk, 1993).
China's historical transformation shows that the delicate balance between economic
growth and political stability is constantly being reshaped. In the post-Deng Xiaoping
period, economic growth was sustained under the leadership of Jiang Zemin and Hu
Jintao, but authoritarian rule continued (Zhao, 2006). Today, although China has
emerged as the world's second-largest economy, it is far from a Western-type democratic
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transformation in political terms (Saich, 2004). This process shows that although China
has become a global economic power, it has developed a different governance model
from Western states by maintaining its authoritarian governance approach (Shirk, 1993).
China's economic and political rise in the last four decades has led to important debates
in international relations. The impact of this rise on the world system is analysed through
different theoretical approaches (Huang & Patman, 2013). Immanuel Wallerstein's World
Systems Analysis and Joseph Schumpeter's concept of creative destruction can help us
look at this issue from a different perspective (Wallerstein, 2004; Schumpeter, 1942).
China's economic growth and technological advances challenge the existing hegemonic
order. Wallerstein's analysis reveals that China's rise is a natural evolution of the global
system and should be considered as an inevitable outcome of hegemonic cycles (Silver,
2020).
One of the defining aspects of China's relationship with the international system is its
economic transformation within the global economy following the reform and opening-
up policies led by Deng Xiaoping in 1978 (Huang & Patman, 2013). The transition from
a centrally planned economy to a more market-oriented economy was marked by several
key steps, including China's accession to the World Trade Organisation (WTO) in 2001.
China's accession to the WTO marked its entry into the global trading system, facilitating
its growth and positioning it as a major player in the world economy. This access to the
EU market depended on a series of effective economic reforms, such as lowering tariffs,
increasing transparency in trade and eliminating subsidies (Jelisavac-Trošić, 2019).
Integration into the global trading system has not only been the main source of China's
export-led growth, but has also mediated access to global markets and technologies for
its industries. However, the integration process has also brought challenges for local
firms, such as intensified competition and higher levels of scrutiny over business practices
(Zhang, 2005). Despite these challenges and setbacks, WTO membership has
consolidated China's leading position in the world economy and demonstrated its
willingness, even eagerness, to become a major player in the global economic system.
Since 1980, China has grown at an average annual rate of over 9%, making it the centre
of the world economy (World Bank, 2022). China's investments in industry and
technology have made it one of the most important players in international trade. While
China's place in the global system is transformative, it is also fraught with challenges.
The Chinese state struggles to balance domestic priorities with external expectations.
For example, domestically, the government places great emphasis on economic stability,
poverty reduction and sustainable development, which sometimes conflict with
international calls for greater market liberalisation and adherence to international
standards (Potter, 2007). In China, the protection of state-owned enterprises or the
regulation of technology industries has been characterised as protectionist, albeit in line
with national strategic objectives. Criticisms of unfair trade practices, intellectual
property theft and barriers to accessing Chinese markets have led to high-profile trade
tensions and tariffs, further escalating tensions (Tyagi, 2020). China's balancing actions
in these two areas are another key level of China's engagement in the global system
(Huang & Patman, 2013).’
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The economic reforms initiated by Deng Xiaoping have profoundly reshaped the global
system, catalysing China's ascent to the status of an economic powerhouse while
introducing complex challenges in international relations and trade. The rapid economic
growth and integration into the global market facilitated by these reforms have created
significant opportunities for global economic development. The country's role as a
significant exporter and importer has intricately linked its economy with those of other
nations, fostering mutual economic interdependence. In particular, the Belt and Road
Initiative has enabled China to expand its global sphere of influence and reinforced its
dominance over global supply chains by increasing infrastructure investments in
developing countries (Mearsheimer, 2019). However, the US and Europe's perception of
this project as a geopolitical strategy has led to tension in the global balance of power.
Joseph Schumpeter's concept of creative destruction can be explained by the
replacement of old economic and political orders with innovative systems. China's
investments in the digital economy, artificial intelligence and green energy are eroding
the US technological leadership in global competition (Breznitz, 2021). While technology
companies such as Huawei, Alibaba and Tencent have become influential players on a
global scale, China's superiority in 5G technologies threatens the US dominance over
technology. From a Schumpeterian perspective, China's rise is not only the result of
hegemonic transformation but also part of the dynamic nature of the economic system
(Schumpeter, 1942).
China's influence in global politics is reflected in its involvement in platforms such as the
Asian Infrastructure Investment Bank and BRICS (Garnaut, Song & Fang, 2018). Its
efforts to create an alternative to Western-centred financial systems enable China to
have a greater say in global governance (Kissinger, 2011). However, China's sovereignty
claims in the South China Sea and its Taiwan policy increase tensions with the West. The
US and its allies see China's expansion of its regional influence as a threat, and this
situation raises the prospect of a new Cold War scenario (Allison, 2017).
Today, China's economy grew by 5.2 per cent in 2023, increasing its total Gross Domestic
Product (GDP) to 126.06 trillion yuan (approximately $17.71 trillion) (National Bureau of
Statistics [NBS], 2024: 3). This growth rate indicates that China is recovering from the
COVID-19 pandemic. Moreover, industrial production and retail sales increased by 4.6
per cent and 7.2 per cent, respectively, in 2023 (NIB, 2024: 5). These data reveal that
China has increased its production capacity and domestic consumption potential.
In terms of foreign trade, China's export and import volumes have also shown a
significant increase. In 2023, China's total foreign trade volume reached USD 6.05 trillion
(Ministry of Commerce of China, 2024: 8). This figure shows that China's share in global
trade is increasing and its effectiveness in international markets is strengthening. In
addition, China's foreign investments have also increased. In 2023, China's direct
investments abroad totalled 153.7 billion dollars (Ministry of Commerce of China, 2024:
12). This shows that China has gone beyond being just a production centre in the global
economy and has become a capital-exporting country.
The Belt and Road Initiative is one of the cornerstones of China's global economic
strategy. The initiative covers a wide range of projects such as infrastructure projects,
ports, railways and energy investments in Asia, Europe and Africa. As of August 2023,
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$22 billion had been invested in 75 projects from the Silk Road Fund (Anadolu Agency,
2023). In addition, the Asian Infrastructure Investment Bank (AIIB) has so far approved
loans totalling $43.6 billion for 227 projects under the Belt and Road (Anadolu Agency,
2023). These investments can be considered as part of China's strategy to increase its
influence in the global economy and rise to the position of a centre country.
Geopolitically, China's investments under the Belt and Road Initiative cover many
countries in Asia, Africa and Europe. For example, in Pakistan, billions of dollars have
been invested in energy and infrastructure projects under the China-Pakistan Economic
Corridor. In Africa, large-scale investments such as railway and port projects have been
realised in Nigeria (Fang, 2024: 35). These investments increase China's economic and
political influence in these regions, bringing it closer to the position of a centre country.
Figure 1. China’s Transition from Semi-Periphery to Near-Centre Status.
Figure generated by the author based on the study’s findings.
In conclusion, as shown in Figure 1, China’s economic performance in recent years, along
with its investments under the Belt and Road Initiative, has positioned it as a country
moving from the periphery to the centre in the context of Wallerstein’s centreperiphery
theory. With its high-tech production structure, increasing foreign trade volume and
international investments, China is gradually increasing its influence in the global
economy.
Shanghai Cooperation Organisation and Regional Sphere of Influence
Policies
In the wake of the Cold War, coupled with China's significant economic and political
challenges at home, China's foreign policymakers continually faced the challenge of
balancing two conflicting self-images: that of a great power and that of a developing
country (Zhao, 2015; Zhang, 2004). They inherently regarded China as a great power
due to its historical legacy, cultural richness, and large population, and they valued its
emerging status on the global stage. However, there was uncertainty about whether
China's capabilities would enable it to wield sufficient influence internationally. Thus, in
this period, China's identity was stressed as a developing country and adopted a cautious
and low-profile approach. This approach was guided by Deng Xiaoping's "taoguang
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yanghui" (韬光养晦) principle, which emphasised concealing China's capabilities,
prioritising national strength-building, and avoiding confrontation.
China's foreign policy changed significantly during Hu Jintao's rule, moving from a low-
profile policy to one that is more proactive and assertive on the international stage. This
was a unique and transformative moment for China on the global stage that saw a sharp
increase in the Chinese economy's and society's diplomatic, economic, and strategic
connections outside its borders. The administration devoted major efforts toward actively
engaging with other nations through international organisations, as well as through the
promotion of the idea of peaceful rise (Wen, 2003). This foreign policy, guided by Deng's
principles, represented a more assertive and active stance in international affairs,
reflecting China's determination for peaceful development and benevolent
interdependence (He & Liu, 2021).
Moreover, China has been a founding and active member of the Shanghai Cooperation
Organisation (SCO), which was created in 2001 based on the earlier Shanghai Five. So
far, the SCO has played a significant role in facilitating China's peaceful rise strategy by
fostering regional security cooperation, economic development, and political stability
among the member states. The principles of mutual respect, non-interference, and
collective decision-making emphasised by the SCO align with China's vision of a
harmonious and balanced international order, contributing to its perception as a
responsible great power on the world stage (Carroll, 2011; Yuan, 2010).
Xi Jinping is the biggest political force in 2012 and has transformed China's foreign policy
into a better vision. Xi has implemented a new approach to diplomacy, known as ''major-
country diplomacy'', reflecting China ability to project confidence in its growing economic
and international standing (Lin, 2018) Xi's language towards multilateralism also pointed
towards a growing role for China as a leader of the developing world, while also
reaffirming this as a step in the right direction towards a multipolar world, where global
power is not only held by one superpower. As a result, China has expanded its role in
international organisations, including the United Nations, the World Health Organisation
and the World Trade Organisation.
Accordingly, Xi has always regarded the SCO as an important channel to increase China's
regional and global clout. Xi has overseen a dramatically expanding SCO, not only in
membership, but in range. India and Pakistan attained SCO membership in 2017, thus
extending its reach to South Asia, while Iran’s membership in 2023 expanded its reach
to the Middle East. Originally established to combat terrorism, separatism, and
extremism, today the SCO's mandate has expanded to encompass a range of issues,
such as energy security and cooperation, economic development, and emerging non-
traditional security challenges. Therefore, the SCO is also the largest regional
organisation in the world based on geography and population, as shown in map 1,
covering about 80 per cent of the Eurasian landmass and 40 per cent of the world
population. By 2021, its members represented 20 per cent of the world’s economy.
Following the inclusion of Iran, the SCO controls one-fifth of the globe’s oil reserves and
44 per cent of natural gas reserves (see Teekah 2025).
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Map 1. Shanghai Cooperation Organisation Members.
Source: Map created by the author using data from the Shanghai Cooperation Organisation
Secretariat website (sectsco.org).
Map 2. Map of countries of the Belt and Road Initiative (BRI) in May 2025
Source: Map created by the author using data from Christoph Nedopil’s findings
(www.greenfdc.org).
China's policy of regional sphere of influence takes root in its economic initiatives, too.
As one of Xi's flagship and most ambitious projects, the Belt and Road Initiative (BRI)
seeks to expand and strengthen connectivity and cooperation between Asia, Africa, and
Europe. The BRI has not only expanded China’s geopolitical clout, but it has also
strategically financed infrastructure projects that allow China to access critical natural
resources and strategic locations. The massive economic growth in China has also
improved China's geopolitical interests by establishing more diplomatic relations with
several countries and enhancing China's soft power and thus enhancing its sway in
shaping regional and global governance frameworks (Chiebuka, Oyedele, & Odike, 2025;
Feng et al., 2023). Map 2 illustrates the extensive network of participating BRI countries,
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underscoring the geographic scope of the initiative and reflecting China’s growing
influence across multiple continents.
Moreover, in Xi's vision of humanity, he has championed the idea of a "community of
common destiny for mankind," which highlighted China's aspiration to build a just and
equitable multipolar world and inclusive and beneficial economic globalisation (MFA,
2025). The ideas of ‘peaceful development’ and the ‘community of common destiny’ are
vastly different. The latter shows that China intends to make great efforts to establish a
new international and regional order and to take the lead in establishing the community
of common destiny (Liu, 2015). This is a clear break from the 'low profile' strategy and
indicates that China wants to take up a more activist role in global governance.” Xi also
stressed what is now referred to as the “two guidances” (两个引), namely, that China
should “guide” the international community as it drives “jointly shape a fairer and more
reasonable new international order” and “jointly safeguard international security”
(Xinhua, 2017). His strong personal interest in foreign affairs marked by extensive
engagements with diplomats and his so-called cloud diplomacy mirrors his hands-on
approach to foreign policy. These changes under Xi's leadership have greatly advanced
China’s aim for multipolarity and also helped to straightforwardly enhance its
multilateralism.
Realising this, we can conclude that China has transformed its regional and global
strategy from the opening-up reforms to the present. Through a more assertive and
multilateral approach, China has bolstered its diplomatic, economic, and strategic soft
power, carving out an evolved and ambitious image of itself that grows from the roots
planted during the Opening Up Reforms. The change illustrates how confident, even
ambitious, China is to reconfigure its global role by using trade, diplomacy, military
modernisation, and technological innovation. A grasp of this shift has much to say about
explaining the tribute and China's plans for the future.
The establishment of the Shanghai Cooperation Organisation (SCO) and the expansion
of the Belt and Road Initiative (BRI) are prime examples of China's proactive engagement
in multilateral platforms and global trade networks. Under Xi Jinping's leadership, these
multilateral strategies have been further prioritised and expanded to solidify China's
regional sphere of influence and promote a multipolar world order. China, once
considered a periphery country, has rapidly ascended to the semi-periphery, and now its
actions can be interpreted as an attempt to transition from a semi-peripheral to a core
power within the global system. This shift is leading to a re-division of labour and
economic opportunities, impacting both the Global North and South (Li, 2020;
Sarieddine, 2021), not only serving to China's economic interests but also positioning it
as a counterweight to Western influence, particularly that of the United States (Jia,
2007). The BRI, in particular, is seen as a potential new world-system where China could
emerge as a core power, exerting significant influence over participating states.
Conclusion: Is World System Theory Adequate to Explain China?
World System Theory still provides an important framework for analysing China's
economic rise and its place in the global system. However, China's economic growth,
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technological development, geopolitical moves, and efforts to create an alternative global
order transcend this classical theory. In other words, we can say that new theoretical
changes are needed for the modern rising powers.
China's high-value-added technological investments, innovation values, new global
projects, and search for new markets take it beyond the classical theory. The reason for
this is that, according to world-systems theory, only central countries produce this kind
of added value. In other words, China goes beyond the traditional definition. According
to the theory, semi-peripheral countries are expected to develop through technology
transfer, but China is not merely an importer of technology; it has created its own
technology giants and begun to assert global leadership in strategic fields such as artificial
intelligence, quantum technology, 10G technology, and space research.
China is also transcending this theoretical model by creating its own regional models in
opposition to Western-centric economic models. The SCO is one of the organisations that
transcends this model. By creating its own regional dynamism through the SCO, China is
once again strengthening its role as a central country. According to World System Theory,
semi-peripheral countries remain in the global economic order as long as they are
dependent on central economies.
The SCO has provided China with the opportunity to reduce its dependence and establish
new economic alliances. The integration of international projects into the SCO, SCO-
centred energy agreements and economic agreements, the expansion of commercial
partnerships with an SCO-centred local currency, etc., have brought China to the position
of a central country.
In conclusion, while the World-System Theory largely explains China's rise in the global
system through the SCO, it has some shortcomings. To fully understand how China will
shape the global system, alternative theoretical frameworks are needed. In addition to
this theoretical approach, theoretical approaches such as hegemony transition theory,
multipolar world theory, the Neo-Gramscian approach, and balance of interests theory
will help complement Wallerstein's theory. New theoretical changes are needed for
modern rising powers.
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