II. Challenges to global governance posed by changes unseen in a century

With the rapid advances in the globalization process,commodities, funds, people, and technologies have become free to flow in a wider span of time and space. The world is getting smaller and smaller, and countries and regions are becoming closely linked at an unprecedented rate and level. However,such close ties have also led to the “spillover” of governance problems in the political, economic, security, and environmental fields across national and regional boundaries, which have become common challenges for the world. Therefore, the number of issues pertaining to global governance has been on the rise, and the participating entities include actors on the global, regional, sub-regional, national, sub-national,and individual levels. The cost of policy communication and coordination has surged, and the difficulty of governance has increased significantly.

The world today is undergoing major changes unseen in a century, posing unprecedented challenges to the global governance system. The world’s governance system today was established under the leadership of the U.S. after World War II and based on a set of institutional arrangements centered on the United Nations, the IMF, the World Bank and other international organizations. Its operations rely to a large extent on the U.S.’s hard and soft power and hegemonic position in the international system. After World War II, Western Europe and Japan also found a voice in the international system as their societies were rebuilt and economies recovered. However, into the 21st century, especially since the 2008 financial crisis, the global governance system dominated by developed countries has encountered an unprecedented crisis.

Developed economies such as the U.S. and those in Europe have found themselves lacking in momentum for sustainable growth as a result of the financial crisis and subsequent ripple effects. These countries have seen growing imbalances in their development, and problems such as class stratification and growing income gap have triggered a serious social crisis. A considerable number of disadvantaged groups believe that they have been abandoned in the wave of globalization, and they blame the decline in their incomes and welfare, and the damage to their interests to the elites who advocate globalization. The counter-globalization movement that has swept the U.S. and Europe and the populist and protectionist trends that have accompanied it are reflections of their anger and dissatisfaction.As a result, the willingness and ability of the U.S. and Europe to lead global governance have declined dramatically, and global governance faces a serious leadership deficit.

Since Donald Trump became President of the U.S.,the Trump administration has pulled out from a variety of institutional arrangements (such as international organizations and mechanisms) in the areas of politics, security, economy,trade, culture, the environment, etc., including the Trans-Pacific Partnership (TPP), the Paris Agreement, the United Nations Educational, Scientific and Cultural Organization (UNESCO),the Global Compact for Safe, Orderly, and Regular Immigration,the Iran nuclear deal framework, the United Nations Human Rights Council (UNHRC), the Optional Protocol to the Vienna Convention on Diplomatic Relations Concerning the Compulsory Settlement of Disputes, the Universal Postal Union, the North American Free Trade Agreement, and the Intermediate-Range Nuclear Forces Treaty. All these “retreats”show that U.S. global policy is undergoing a major change under Trump’s leadership, shifting its focus from “globalism” to “self-centeredness”. The logic behind the U.S. behavior of “making retreats as advance” and “breaking the old to make the new”is essentially to prioritize its national interests and disregard multilateral cooperation (from Decoding Trump’s Diplomacy edited by Wu Xinbo and Song Guoyou). The U.S. today is more concerned with translating its super strength and hegemony into tangible high returns. It has lost interest in leading the world to cope with global challenges.

The situation in Europe is equally worrying. The gradual advancement of the European integration process since World War II and the establishment and development of the EU have been considered an exemplar of regional political and economic integration and supranational governance. At present,however, major European economies are yet to be able to shake off the effects of the global financial crisis, economic growth is sluggish, and the Eurozone still faces systemic risks. Moreover, the economic plight has undermined social stability of the entire Europe. Major countries in Europe are now mired in multiple crises, such as increased racial conflict,a massive influx of refugees, and frequent terrorist attacks. The long delay in the Brexit process has caused continued turmoil and uncertainty. Therefore, the EU, which has billed itself as “a normative power” and acted an ambitious player in the international arena, seeking to exert leadership and influence, is now caught in multiple internal governance dilemmas, and its capacity to dominate the global governance agenda has declined significantly.

In addition to the leadership deficit, another major challenge facing the current global governance system is the ineffectiveness of governance. Peace and development are the core concerns of the world. However, in recent years,the existing governance system has been unable to meet the challenges posed by increasingly serious and complex international security and development issues.

First, there is a grave global security governance deficit.Since the end of the Cold War, while there have been no major wars on the global scale, regional hotspot issues have erupted,and low-intensity armed conflicts and even local wars have occurred, especially in the Middle East and Africa. Some countries face the problem of insufficient government legitimacy and their government agencies are weak and ineffective. The government lacks sufficient capacity and the willingness to provide security for its citizens. In such a context, international organizations become the actual providers of security. Although the UN peacekeeping system has undergone a number of reforms, its performance in conflict prevention, mediation and reconciliation processes, and reconstruction operations still falls short of expectation. In addition, the confrontation between Russia and the U.S. and Europe has put Eurasia in a state of constant tension. The security dilemma caused by the U.S.military alliance system in the Asia-Pacific region is difficult to resolve, and geopolitical competition in the Indo-Pacific region has also intensified.

Second, the global development deficit is growing.For many developing countries, the lack of funding for development has long curtailed the achievement of sustainable development goals (SDGs). According to the United Nations Conference on Trade and Development (UNCTAD), developing countries would need to invest USD3.3 trillion to USD4.5 trillion annually to reach the SDGs for 2015-2030. The Addis Ababa Action Agenda was adopted at the Third International Conference on Financing for Development held in July 2015 to solve the problem of financing for the world’s development. The Agenda contained more than 100 specific measures and policy recommendations for the financing of the world’s sustainable development in 2015-2030. However, developing countries’ lack of funding has not been eased but been exacerbated since the adoption of the Agenda. The existing multilateral development institutions have limited financing capacity and are far from being able to meet this huge and growing need for funding. The foreign aid system is structurally defective and is hardly able to substantially improve the economic development of recipient countries.

In addition, traditional developed economies’ contribution to global economic growth has fallen sharply while emerging economies are on the rise. Structural changes are taking place in the global economic landscape. Emerging economies and developing countries have been gravely underrepresented in the system of global economic governance established after World War II. The existing governance structure cannot reflect the current economic reality of the world. However,developed countries still have a greater say in existing economic governance mechanisms, and emerging economies, hindered at every turn, are finding the process of reforming governance mechanisms difficult and slow. This situation has in some ways aggravated the failure of global economic governance and is not conducive to the achievement of common development and prosperity.