China’s Financial Institution Replacing Britain Wood System; And Its Impact On Global Financial System

https://doi.org/10.5281/zenodo.18634816

Abstract

This study explores the evolving global economic dynamics shaped by the intensifying rivalry between the United States and China, with a particular focus on China’s challenge to the International Monetary Fund (IMF) and the broader global financial architecture. It highlights how China, through the expansion of its financial institutions and bilateral lending mechanisms, is systematically duplicating and undermining IMF influence offering direct financial support to allies without the conditionality typically imposed by Western institutions. The research identifies a shift from traditional economic order to a liberal version of hegemonic stability theory, where China now positions itself as a new economic hegemony, influencing debt diplomacy, trade agreements, and investment flows. The U.S. response, marked by missed strategic opportunities, has allowed China to become a protagonist in restructuring global finance, particularly in underdeveloped regions. The findings suggest that China’s outward economic strategy is not only reshaping global power relations but is also pushing the IMF, World Bank, and GATT structures toward an identity and relevance crisis in the 21st-century geopolitical landscape.