Financing the Grand Strategy of Great and Rising Powers

How can great and rising powers finance their grand strategy? What enables and constrains a state’s ability to finance its grand strategic needs? Under what conditions are leaders able to implement their desired financial strategy? When considering the various means available for financing grand strategy, leaders are concerned with raising revenue to implement their grand strategy as well as staying in power. Financing grand strategy, however, presents an intertemporal dilemma for leaders: a politically costly fiscal sacrifice today for benefits accrued in the future. This chapter advances an analytical framework and offers illustrative examples to understand how leaders navigate this intertemporal dilemma. First, the chapter addresses the scope of the study: military spending of great and rising powers. Second, it presents the various financing options and addresses the short- and long-term political and economic costs of each. Third, it offers three variables that condition leader willingness to incur the short-term political costs of financing grand strategy: regime type, whether a state is a rising or great power, and the degree of clarity in the threat environment.

“A Coherent Body of Thought and Action”

Chapter 1 defines grand strategy and international order. It then explores how rising powers displace hegemonic order through strategies of blunting, building, and expansion. First, the chapter argues that grand strategy is a theory of how a state can achieve security integrated across military, political, and economic means; and that finding it requires evidence of grand strategic concepts, capabilities, and conduct. Second, the chapter argues that international order emerges from a web of hierarchical relationships sustained by “forms of control” including coercion, inducement, and legitimacy—and that US-China competition is primarily over regional and global order. Finally, the chapter argues that rising powers can blunt a rival order by weakening its “forms of control” and build order by strengthening their own. Rising power perceptions of the hegemon’s power and threat shape the selection of rising power grand strategies.

China’s challenge to the global commons: compliance, contestation, and subversion in the maritime and cyber domains

It is often predicted that rising powers such as China will seek to reshape the international order as they gain influence. Drawing on comparative analysis of the maritime and cyber domains, this article argues that China poses a challenge to the global commons because its actions reflect a pragmatic focus on national interest that that disrupts more collaborative conceptions of their governance. However, instead of directly rejecting existing regimes, China has pursued a mixed strategy of complying when these regimes confer benefits and employing contestation or subversion when they conflict with its strategic aims. In particular, China has used contestation and subversion to push for the enclosure of the maritime and cyber domains, extending ideas of sovereignty and territoriality to them to varying extents. While the relatively well-institutionalized nature of maritime governance has limited China’s focus to the application of specific rules in areas where it prioritizes sovereign control, the embryonic status of the cyber regime has enabled China to call into question the fundamental definition of cyberspace as a global common. Subversion has also allowed China to accomplish strategic goals through ‘gray zone’ tactics, resulting in increased conflict below the level of war in both domains.