Redefining China’s International Investment Approach in Strategic Competition with the United States, 2008-2023

Document Type : Original Article

Authors

1 M.A. in International Relations, Faculty of Law and Political Science, Allameh Tabataba'i University, Tehran, Iran

2 Associate Professor, Department of International Relations, Faculty of Law and Political Science, Allameh Tabataba'i University, Tehran, Iran

3 Assistant Professor, Department of Insurance Economy, Allameh Tabataba’i University, Tehran, Iran

10.22099/ijas.2025.53822.1043

Abstract

Introduction
In today’s international system, the strategic rivalry between China and the United States—the world’s two leading economic powers—has assumed new dimensions and complexities. Although this rivalry has intensified over time, both powers have thus far managed to contain it largely within the economic and strategic realms, avoiding direct security or geopolitical confrontation. Nonetheless, China’s approach over the past decade appears to have undergone a notable transformation, particularly within the field of international political economy. This study, therefore, seeks to address the following question: How has China's transformation of its international investment approach affected the dimensions of its strategic competition with the United States? Initially, China concentrated its investments in U.S. financial markets. However, the 2008 global financial crisis triggered a profound shift in its strategy. China adopted a policy of diversifying and redistributing its global investment portfolio, most prominently through the Belt and Road Initiative (BRI). In response, the United States and its allies have advanced alternative frameworks, such as “Build Back Better World (B3W),” “Global Gateway,” and “Asia–Africa Growth Corridor,” to counter China’s initiatives.
 
Methodology
This study, grounded in the assumptions of the scientific–empirical approach and employing an explanatory method, seeks to redefine China’s international investment strategy within the context of its strategic competition with the United States. By adopting a deductive research strategy, the analysis integrates Robert Gilpin’s theories of “hegemonic transition” and “hegemonic stability” with Robert Solow’s model of economic growth to construct a comprehensive analytical framework. In addition, research is categorised as functional, case study, and trend study.
 
Result and discussion
Following the onset of China’s economic reforms in 1979, the country experienced sustained growth across a range of economic and industrial indicators. Beijing channelled the surplus generated by these developments into U.S. financial markets, seeking not only higher returns but also political leverage over Washington’s policy decisions. However, the 2008 global financial crisis marked a turning point in this trajectory. Although the crisis inflicted heavy losses on the U.S. economy, major economic powers, and China’s own financial assets abroad, its most profound impact lay in shattering the perceived myth of U.S. economic invincibility among Chinese policymakers.
In the aftermath, China underwent a significant transformation in its investment strategy. Consequently, in 2013, Beijing launched the Belt and Road Initiative as a new framework for expanding its presence in the international economy. Within this project, Europe is important for its robust markets, Africa for its untapped natural resources and growth potential, and the Middle East for its strategic role in global energy supplies. To achieve its long-term objectives, China has invested substantially across these regions.
In response, the United States and other major powers have sought to prevent China from consolidating dominance in these sectors. Japan has increased investments in East Asia, India, Central Asia, and Africa. At the same time, the European Union has launched the “Global Gateway” initiative and the United States has introduced the “Build Back Better World” plan—all designed to counterbalance China’s expanding economic influence.
 
Conclusion
Following the 2008 financial crisis, China has sought to advance its strategic objectives in international political economy through the Belt and Road Initiative. The initiative serves several key purposes. First, it aims to diversify China’s global investment risks, reducing dependence on a limited number of markets and mitigating potential losses in the event of future crises. Second, it seeks to gain political leverage by investing in and aligning with states that rely on foreign capital for their development. Third, China aspires to create new export markets for its industrial output by fostering growth in partner economies. Fourth, by expanding land-based transport corridors, Beijing intends to reduce the strategic advantage of maritime routes, thereby weakening U.S. dominance at sea while promoting alternative land routes over which China exerts greater influence. Fifth, the initiative represents a step toward achieving relative economic autonomy and shaping an emerging international political economy in which China plays a more prominent role. Nevertheless, while the BRI has thus far outperformed competing initiatives, one must recognise that China’s rivals remain major global economic powers—actors unlikely to concede strategic ground easily in this evolving geopolitical contest.



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References

 
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Journal of Asian Regional Order Studies
Volume 2, Issue 2 - Serial Number 3
October 2025
Pages 177-220

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History

  • Receive Date: 27 May 2025
  • Revise Date: 25 July 2025
  • Accept Date: 14 September 2025
  • Publish Date: 23 September 2025

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