This chapter provides a detailed discussion of our “institutional peace” argument. Specifically, we propose that during the period of international order transition, the United States and China have employed a range of institutional balancing strategies that encompass both inclusive and exclusive approaches. These strategies are aimed at competing for leadership roles and the privilege to shape rules within and beyond the realms of international institutions. We underscore the significance of three positive externalities resulting from institutional balancing: the revitalization of institutions, the encouragement of regional cooperation, and competition in providing public goods. These externalities can contribute to a more peaceful transition within the international system, provided that the US and China engage in responsible competition under three crucial conditions: the maintenance of sustained nuclear deterrence, the continuation of deep economic interdependence, and the mitigation of ideological antagonism.

This chapter offers a summary of our research findings on the upside of the US-China competition within the security, economic, and political suborders in the Asia Pacific region. In addition, we emphasize two primary challenges to achieving institutional peace in the region: the escalating power rivalry between the US and China, which can lead to proxy wars/conflicts, and the inclination toward irrational and risk-taking decisions by leaders in both nations, often influenced by domestic politics. While it remains the responsibility of the United States and China to prudently manage their strategic competition, we contend that the involvement of secondary states within the region can play a crucial and independent role in mitigating tensions between these two superpowers over critical issues, such as the Taiwan issue and the South China Sea disputes. Their active engagement is indispensable for fostering institutional peace within the Asia-Pacific.

By unpacking the two pillars of international order – the power pillar and the institutional pillar – this chapter examines why Graham Allison’s “Thucydides Trap” argument is misleading in analyzing international order transition. We argue that a mere power shift between the United States and China does not necessarily indicate an order transition; fundamental changes in both the power and institutional pillars are necessary conditions for the international order transition. While the principle of mutually assured destruction (MAD) prevents direct military conflicts between the US and China, it is undeniable that intense strategic competition has become an inescapable reality between the two nations. Subsequently, we outline the two research questions guiding this project: (1) How do the United States and China compete with one another through international institutions? and (2) What are the implications of their institutional balancing for the ongoing process and outcome of international order transition?

This chapter focuses on US-China institutional balancing within the political suborder, with a specific focus on the intricacies of the strategies employed by both nations within the framework of global human rights regimes in the United Nations (UN) system. This ideological competition becomes evident in the battle for influence in various UN human rights regimes, where both the United States and China have actively attempted to shape the discourse and policies related to human rights, democracy, and governance in alignment with their respective visions. As states grapple with these contrasting visions and carve their unique paths, a more diverse tapestry of political ideologies, governance models, and regional cooperation initiatives has emerged. This dynamic reflects the unintended positive consequences resulting from the institutional competition between the United States and China, ultimately nurturing a more complex and adaptable political landscape in the region.

This chapter conducts an in-depth examination of the US-China institutional competition within the security suborder in the Asia-Pacific region. It offers a comprehensive analysis of two distinct rounds of institutional balancing between the United States and China, which involve key forums like the ASEAN Regional Forum (ARF), Shangri-La Dialogue (SLD), Conference on Interaction and Confidence-Building Measures in Asia (CICA), Shanghai Cooperation Organization (SCO), Quadrilateral Security Dialogue (Quad), and ASEAN Defense Ministerial Meeting (ADMM)-Plus, spanning the post-Cold War era. Our argument suggests that this robust rivalry in institutional balancing between the United States and China has given rise to a dynamic security architecture within the Asia-Pacific region. Within this framework, bilateralism, minilateralism, and multilateralism coexist and intersect, resulting in a complex and nuanced security architecture.

Chapter 4 shifts its focus to the US-China institutional balancing within the economic domain and its consequences for the transformation of the economic suborder. It systematically examines the institutional balancing efforts between these two nations through the Asian Infrastructure Investment Bank (AIIB), Belt and Road Initiative (BRI), Regional Comprehensive Economic Partnership (RCEP), Trans-Pacific Partnership (TPP), and Indo-Pacific Economic Framework (IPEF). The unintended consequences stemming from this institutional balancing between the United States and China within the economic sphere signal the emergence of a multifaceted network of economic institutions and initiatives that transcends the conventional “noodle-bowl” model, characterized by interwoven free trade agreements.