After decades of relative geopolitical calm, the world has entered its most volatile and dangerous period since the depths of the Cold War. Consider recent events. Despite U.S. President Joe Biden’s high-profile meeting with Chinese President Xi Jinping in San Francisco last month, relations between their two countries have deteriorated so sharply that a war between them, though unlikely, is no longer unthinkable. The COVID-19 pandemic, although largely in the rearview mirror, unleashed political and economic shocks that continue to reverberate across the global system. Russia’s brutal invasion of Ukraine plunged Europe into a destabilizing war with far-reaching consequences for trade and markets worldwide. And on Oct. 7, Hamas’s terror attacks against Israel sparked a new Middle East war that threatens to destroy years of progress toward economic transformation and regional stability.
These global shifts and shocks are often grouped together, and for good reason. According to International Monetary Fund (IMF) economists, they are among the drivers of a “policy-driven reversal of global economic integration” termed “geoeconomic fragmentation.” For some analysts, they are constituents of a so-called polycrisis, in which a series of disparate shocks “interact so that the whole is even more overwhelming than the sum of the parts.” And the White House itself has repeatedly highlighted how it helped crystalize thinking about the links between national security and economic policy to produce a “New Washington Consensus.”
But in our view, recent events are best understood as symptoms of a broader, metastasizing crisis in global politics: a crisis of credibility. As it becomes apparent that no one power is seen as both willing and able to single-handedly uphold the international order, and great powers refuse to cooperate to do the same, the international system itself is rapidly losing credibility. This global credibility gap, in turn, is compounding geopolitical instability and uncertainty as actors ranging from competitive and opportunistic states to terrorists and criminal elements take advantage of the political vacuum. Though hardly irreversible, it’s a trend that is likely to get worse before it gets better.
Interactions between states depend on perceptions of power, which are correlated with assessments of credibility. In its everyday meaning, credibility is whether someone or something is trusted or believed in. The same holds true for states, especially great powers and the regional and international orders that they shape. If an order lacks credibility, its detractors—and even disillusioned adherents—cease to abide by established rules and conventions. The result, unsurprisingly, is disorder and instability of the type we are witnessing today.
For states, credibility involves several key variables: hard military and economic power; the soft power of political and cultural attraction; and more intangible qualities related to reputation, history, and context. Hard and soft power are necessary but not sufficient for a state to be credible; others must also believe that it will follow through on commitments and meet expectations.
Credibility is the leverage that allows states to turn power into influence. States use threats and promises to deter adversaries, reassure allies and partners, and compel actions. But carrying out threats and making good on promises is costly. Credibility allows states to achieve their desired outcomes at minimal cost to themselves, advancing their priorities beyond what raw power would allow.
Although policymakers often conflate the two, credibility is not synonymous with resolve. Indeed, scholars have rightly questioned the invocation of credibility as a justification for policy misadventures. “Instead of bolstering one’s credibility,” as Stephen Walt has argued in these pages, “defending a lot of secondary interests for the sake of one’s future reputation may unintentionally undermine it.” Yet even skeptics do not argue that credibility is unimportant—just that it is too often invoked recklessly.
At the global level, credibility makes alliances and deterrence work, increasing cooperation and reducing the risk of conflict. When major powers possess credibility, the orders that they uphold are perceived as legitimate by other states, which recognize their own interest in the preservation of those orders and willingly operate within them. But when the credibility of major powers erodes, so too do the incentives for other actors to moderate their behavior. The credibility of the world’s leading powers is thus a prerequisite for the creation and maintenance of international order and geopolitical stability.
Despite recent efforts to stabilize U.S.-China relations, the most important dynamic in global politics remains the deepening competition between Washington and Beijing. And at the heart of that rivalry is a contest to shape the international order. While U.S. policymakers believe that Washington is “better positioned than any other nation [to] define the world we want to live in,” they recognize that Beijing “is the only competitor with both the intent to reshape the international order and the growing capacity to do it.”
Not only are the United States and China competing for global leadership, they are also, given their overwhelming lead in terms of economic size and military might, the only states that can plausibly claim the capacity for it. The question is whether Washington or Beijing possesses the credibility to persuade other states to follow their lead. The ongoing geopolitical recalibration that we’re seeing worldwide suggests that there are reasons to doubt it.
As the incumbent global leader, the United States is the guarantor of the current global order. But it is increasingly seen as unwilling and unable to play that role, at least without a broad concert of likeminded powers. And as the only plausible challenger, China is positioning itself as the principal alternative to the United States, although Beijing is often seen as unable to fill Washington’s shoes. In the absence of great power cooperation, then, geopolitical stability and a renewed international order appear a long way off.
The United States and China, however, are not starting from the same position. Nor does their credibility matter equally. Given the scale and scope of America’s global commitments, Washington’s power is significantly more leveraged on credibility than Beijing’s. The trajectory of geopolitical stability accordingly depends far more on the credibility of U.S. threats and promises than those of its strategic rival.
U.S. credibility has underpinned the postwar global order that Americans have benefited from for more than 75 years. It’s a well-known story. After World War II, the United States harnessed its economic and military superiority to spearhead the reconstruction of Europe and Japan and the creation of the United Nations and the Bretton Woods institutions. Crucially, it drew on its stock of credibility to construct those institutions and persuade other states—including newly independent ones in Africa and Asia—to join them.
During the Cold War, Washington leveraged its credibility to build a network of military alliances, most importantly NATO, and under the Truman Doctrine to support nations “resisting attempted subjugation by armed minorities or by outside pressures.” But at the core of this policy to contain the Soviet Union, its architect George Kennan wrote, was “a test of the overall worth of the United States,” including whether it could successfully manage both “the problems of its internal life” and “the responsibilities of a world power.”
Washington’s record on both counts was mixed. The “city upon a hill,” a beacon of freedom and democracy, coexisted with racial segregation under Jim Crow lasting until the 1960s. That terrible inequality, as well as interventions to topple foreign governments, undermined U.S. leadership abroad. Yet the United States’ capacity for self-criticism, reform, and rejuvenation meant that when the Berlin Wall fell in 1989, U.S. democracy, however imperfect, remained a model around the world.
U.S. credibility arguably reached its height in the 1990s—the onset of a “unipolar moment” of unrivaled American dominance. With military primacy, the world’s largest and most dynamic economy, an extraordinary cultural attraction that compelled Joseph Nye to coin in these pages the term “soft power,” and widespread confidence in U.S.-led globalization, Washington presided over what some observers later termed a “liberal international order.” America’s AAA geopolitical credit rating allowed Washington to project power widely without risking overextension.
Although the United States remains the world’s leading power in 2023, it is no longer obvious that it can single-handedly uphold—still less revitalize—the international order. This reflects not only a shifting balance of power, principally marked by the rise of China, but also other countries’ concerns about the growing gap between the United States’ global commitments and its willingness and ability to follow through on them. There are growing doubts about Washington’s credibility.
Those doubts are not primarily about hard power. At $27 trillion, U.S. GDP accounts for roughly 25 percent of global economic output—the same share as at the end of the Cold War. Many of the world’s leading and most innovative companies are based in the United States and are often founded and led by first- or second-generation immigrants. And despite continued speculation about potential alternatives, the U.S. dollar remains the world’s reserve currency by a wide margin.
The immense and dynamic U.S. economy supports its position as the only country capable of projecting military power across the globe; its defense budget—approximately $877 billion in 2022—remains the world’s largest. With some 750 military bases in 80 countries, moreover, the United States enjoys an unrivaled defense network that facilitates its global power projection.
Washington, of course, faces significant economic and strategic challenges. The United States’ national debt reached $33 trillion in September, with interest payments exceeding fiscal year military program spending for the first time through August 2023. The IMF projects that the U.S. economy will grow by just 2.1 percent in 2023 and 1.5 percent in 2024. And intensifying global efforts to decrease reliance on the U.S. dollar, although in early stages, could reduce its centrality over time.
Washington’s military lead, moreover, is shrinking in the world’s most strategically important region, the Indo-Pacific, amid a rapid build-up and modernization effort by Beijing. And with ongoing wars in Europe and the Middle East, it’s an open question how Washington would manage if another crisis were to materialize in the Taiwan Strait.
But the credibility crisis ailing the United States results principally from factors closer to home: its own recent foreign-policy choices and deepening domestic division and dysfunction.
In the last two decades, U.S. foreign policy decisions have alienated both traditional U.S. allies and developing countries in the Global South. The 2003 invasion of Iraq was especially damaging, seriously eroding global trust in Washington. The decision not to enforce the “red line” over chemical weapons use in Syria further undermined U.S. credibility. More recently, U.S. threats to withdraw from NATO and its abandonment of the Trans-Pacific Partnership undercut its reliability as both a strategic and commercial partner.
Because credibility is context-specific, however, different countries can draw different conclusions about the same policies. When the U.S. withdrew from Afghanistan in 2021, for instance, many commentators and policymakers saw it as a massive hit to U.S. credibility. Yet others suggested that the withdrawal could bolster U.S. credibility elsewhere by signaling that Washington was serious about reorienting its foreign policy. U.S. military, humanitarian, and financial aid to Ukraine and wide-ranging sanctions on Russia, moreover, bolstered Washington’s credibility with many advanced industrial democracies while leading some countries in the Global South to conclude that U.S. policymakers prioritize European over non-Western interests.
But the most serious factor undermining U.S. credibility may be what Kennan called the “problems of its internal life.” In recent years, the United States’ society and political system have become increasingly divided and dysfunctional. Life expectancy has declined as income inequality has grown, and many indicators point to increasing polarization: public trust in the U.S. federal government is at record lows, nearly two-thirds of Democrats and Republicans believe that members of the opposite party are more dishonest and immoral than other Americans, and a small but growing number of Americans—on both sides of the aisle—believe that political violence can be justified. After Jan. 6, 2021, the United States no longer has an uninterrupted history of peaceful transfers of power.
Small pockets of the country are also driving big political swings. Fewer swing states and districts mean that members of Congress have fewer incentives to compromise, and control of the executive branch depends on the same narrow group of swing states. This results in foreign-policy volatility in the White House and partisan gridlock on Capitol Hill, with Congress regularly slowing or blocking appointments and confirmations. One recent example makes the point: when Hamas launched its brutal terrorist attacks on Israel on Oct. 7, the United States had no speaker of the House and no confirmed ambassadors in Israel, Egypt, Oman, or Kuwait.
Mounting evidence makes clear that domestic politics have eroded the United States’ global credibility. U.S. allies in Europe fear that American support for both Ukraine and NATO will shift with the domestic political winds. Many of Washington’s traditional partners in the Middle East are growing skeptical about long-term U.S. commitments, prompting some to increase economic and even military ties with China. And in the Indo-Pacific, even staunch U.S. allies worry about Washington’s reliability. U.S. adversaries, for their part, seek to exploit its polarization through influence and intelligence operations.
While the United States remains the world’s leading power and retains a great deal of international goodwill, Washington’s allies are less sure of its leadership, its competitors are more emboldened, and countries in the middle are increasingly hedging their bets.
China—in contrast to the United States—played a relatively minor role in developing the current international order. Although Beijing was an important foreign-policy actor at times during the 20th century, it was largely preoccupied with domestic concerns and punched below its weight in international politics, given its population and potential.
But since leader Deng Xiaoping’s reforms in the late 1970s, China’s economy has grown at the extraordinary reported average rate of 9 percent annually and more than 800 million Chinese people have lifted themselves out of subsistence-level poverty. Many countries in the Global South now view Beijing as a model of rapid economic development. U.S. policymakers once even hoped that China would become a responsible stakeholder in the current international order.
More recently, however, China has sought to leverage its newfound strength in an attempt to remake global politics, notably through its global Security, Civilization, and Development initiatives. Beijing’s intent is summed up by Xi’s ambition for China to “take center stage in the world.” And since Xi’s accension to power, China has pursued an increasingly assertive foreign policy with expansive territorial claims in the South China Sea and against Taiwan, a position of “pro-Russian neutrality” over Moscow’s invasion of Ukraine, and even brokering the normalization of relations between Saudi Arabia and Iran earlier this year.
This assertive foreign policy is backed by a growing People’s Liberation Army, which the Pentagon estimates is now the world’s largest. China could have 1,500 nuclear warheads by 2035—almost four times its current stockpile. Critically, a growing number of assessments and wargames conclude there is no guarantee that, if challenged, the United States could preserve the status quo in the Taiwan Strait on its own.
China is the most formidable competitor the United States has ever faced—a reality most apparent in the economic domain. Beyond having the world’s second-largest GDP, China is its largest exporter, the top trading partner for more than 120 countries, and a linchpin for many global supply chains, including those essential to the energy transition. Many organizations still forecast that China will become the world’s largest economy before mid-century, potentially seizing a position the United States has held for roughly 150 years.
Yet China’s economy has not met the “Chinese century” predictions that were common until recently, and there are reasons to believe that its recent slowdown is more structural than cyclical: China’s annual GDP growth declined from 10 percent in 2003 to 7.8 percent in 2013 and Goldman Sachs Research projects that figure will be 5.3 percent this year. The IMF forecasts China’s growth could be as low as 3.7 percent by 2027. China’s demographic outlook is among the world’s most challenging, with its population already declining according to the United Nations. It is unclear, moreover, if China will overcome the middle-income trap over the next decade. What many have called its social contract—whereby citizens refrain from politics in exchange for the promise of economic opportunity—is fraying, especially among young people.
In that context, the formerly widespread view that economic liberalization would lead to political liberalization in China has vanished. Today, Xi appears to prioritize political control over economic growth. And as one of us has written, by concentrating steadily more power into his own hands, surrounding himself with loyalists, and eliminating longstanding norms around succession, Xi has made China’s political system more brittle and less capable of self-correcting.
The combination of increased external assertiveness and tightened domestic political control has undermined China’s soft power and dealt a severe blow to its international credibility. While global public opinion is difficult to measure, it is clear that negative impressions of China rose sharply in recent years, especially after the COVID-19 pandemic, although views are more favorable in Africa and Latin America than in advanced industrial democracies. Spooked by the implications of China’s foreign and domestic policies, policymakers in the West as well as countries such as India, the Philippines, and Vietnam are hedging their bets by aligning more closely with Washington—despite concerns about U.S. credibility.
For the first two decades of the 21st century, narratives about China’s rapid growth, development, and modernization boosted its credibility and, in many countries, its appeal as an alternative to U.S. leadership. China is now facing tough questions about whether those narratives still hold.
Because neither the United States nor China is seen as both willing and able to uphold and responsibly reform an international order that is truly global in scope and that reflects the realities of 21st century international politics, the credibility of the current international system is rapidly eroding. As a result, deepening leadership and institutional vacuums are creating the conditions for new macro trends with far-reaching implications.
The credibility crises facing the United States and China, combined with 20 years of emerging market convergence, have led to the rise of powerful new group of global players: “geopolitical swing states.” These are relatively stable middle and regional powers—including but not limited to Brazil, India, and Saudi Arabia—with agendas independent of Washington and Beijing, as well as the will and capacity to advance them. Today’s crisis in global leadership is increasing risks for these states, but also giving them more room to maneuver. And even absent ongoing great power competition, their economic and diplomatic power make them increasingly potent forces in geopolitics.
These states often pursue the foreign-policy strategy of multi-alignment, seeking partners on an issue-by-issue basis, hedging U.S.-China relations, and pursuing agendas outside the context of great-power competition. India, for instance, is the paradigmatic example of a geopolitical swing state. New Delhi has emerged as a key Western strategic partner, including for firms looking to diversify their supply chains and investments, yet it continues to engage with U.S. adversaries such as Russia and Iran. Its strategy of multi-alignment has clear appeal throughout the developing world, where India is increasingly viewed as a leader and an advocate.
Saudi Arabia has also attempted to use its status as the wealthiest Arab country, the world’s leading energy producer, and custodian of the two holiest Muslim cities, Mecca and Medina, to secure a greater leadership role in the Global South. But far from seeing each other as rivals, Saudi Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi have grown closer in ways that position their countries more strategically in the evolving global order.
Over time, geopolitical swing states will have a significant impact on the global balance of power and the world economy, driving policy agendas ranging from sustainability to infrastructure—a trend that will only grow more pronounced as emerging markets seek new sources of capital. The United States and China will each seek to court and thwart these states to advance their own interests, but neither great power can accomplish its objectives without them.
We’re also seeing shifting international alignments and new forms of international cooperation. Where existing multilateral arrangements are seen as less credible or not fit for purpose, new groupings are beginning to fill the void.
Democratic countries, for instance, are building issue-specific coalitions—such as the U.S.-EU Trade and Technology Council—while legacy multilateral institutions are expanding their remits. For example, while NATO’s core focus remains European security, the nearly 75-year-old alliance is broadening and deepening its engagement in the Indo-Pacific. The United States, meanwhile, is building new defense partnerships, headlined by the AUKUS agreement, and deepening collaboration through the Quadrilateral Security Dialogue, which includes Australia, India, and Japan.
Meanwhile, China is building closer ties with its own partners—countries such as Russia, Iran, and North Korea—and trying to position some economic forums, notably the BRICS grouping (now BRICS+) as alternatives to Western-led institutions. Many countries, however, are wary of this approach and would prefer to focus on multi-alignment. Indeed, BRICS members Brazil, India, and South Africa—as well as invitees such as Saudi Arabia and the United Arab Emirates—retain close ties with the West.
Geopolitics are also changing how goods and services move around the world, with a new focus on diversification and resilient supply chains over economic efficiency. Chinese policies such as Made in China 2025 and “dual circulation” are matched by Western efforts to “de-risk” supply chains, with both sides aiming to reduce dependence on each other in strategic sectors such as advanced technology while promoting domestic production. Many developing countries, meanwhile, are leveraging their positions in critical mineral supply chains through greater resource nationalism.
Fragmentation, however, does not mean that globalization is ending, and supply chains that are not sensitive for national security will likely avoid de-risking. Nonetheless, patterns of international trade and investment are shifting, becoming more politicized and less efficient as governments and firms reshape how they approach economic decision-making in a more contested global environment.
The credibility crisis is also creating space for the world’s biggest private technology companies to play larger, more autonomous roles in global politics. Many of these companies exercise near-sovereign powers over digital space and are increasingly challenging nation-states as geopolitical actors—a significant and historic transformation in the international system.
The diffusion of power and sovereignty away from states and toward tech firms that characterizes this emerging “technopolar” world is exacerbated by the fact that these largely unregulated companies do not have a natural seat at the geopolitical table. And there is little evidence that, collectively at least, they seek it.
Tech companies derive their power not from social contracts or military might, but from their near-absolute control over the data, code, and servers that make the digital world function. This allows them to set rules and exert power in virtual space much like governments do over physical territory. Last year’s public debut of generative artificial intelligence (AI) will likely only accelerate this trend.
But tech firms are operating with growing autonomy in the physical world too. As states’ credibility has eroded, tech companies are providing a growing share of the digital and physical infrastructure on which modern economies depend and that will drive the next wave of innovation, from 5G networks to semiconductors and AI. And they increasingly are shaping the international environment in which governments operate as more of our private, social, economic, and civic lives shift online—and as emerging technologies, including AI, expand their capabilities.
Critically, it is unelected, unaccountable, and often unpredictable private actors pursuing their private interests that will increasingly affect geopolitical outcomes. Indeed, the balance of power in the 21st century may well be defined as much by competition between tech companies and countries—or among tech companies—as it is by competition between the United States and China.
Perhaps the clearest outcome of the credibility crisis is the erosion of international cooperation on urgent transnational challenges, from pandemics to climate change and disruptive technologies. These issues affect the global commons and cannot be adequately addressed by individual countries acting alone.
International cooperation is hard enough to achieve at the best of times. The erosion of trust in the world’s leading powers, however, makes other states even less willing to limit their sovereignty by accepting binding rules and making costly investments. The result is a global governance deficit—a mismatch between the proliferation of transnational issues and the reluctance or inability of countries to address them.
This problem was all too evident during the COVID-19 pandemic, when geopolitical rivalries, weakened international institutions, and beggar-thy-neighbor policies led to shortfalls of critical medical equipment and major disparities in the global distribution of vaccines. It also underpins the world’s collective failure to address climate change and biodiversity loss, which are already having major consequences, from agriculture and finance to food security and refugee flows.
New and disruptive technologies including generative AI further highlight this global governance deficit. AI systems hold immense promise but also pose great risks, and states lack the technical expertise and bureaucratic agility to govern AI effectively. The most powerful national actors—the United States and China—also fear falling behind their competitor in an AI arms race, while private tech firms have no official role in the AI governance process even though they are the principal actors in that space. Without renewed, credible leadership that enables urgent global cooperation, unconstrained AI proliferation will further destabilize the international order.
In a world where great powers—and the international order that they uphold—are credible, other countries recognize their own interest in working with those powers and within that order. But when great-power credibility erodes, so too do the incentives for countries and other actors to respect established rules and conventions, intensifying geopolitical competition and destabilizing the international order as a result.
Although the United States has not lost significant power in recent years, its credibility has diminished, whereas China has gained significant power but not the credibility to match it. As a result, both countries suffer from a significant and growing credibility gap that, in turn, is draining the global system of its own credibility and legitimacy.
Today, with renewed instability in the Middle East, a grinding war in Europe, mounting tensions in the Indo-Pacific, and ongoing technological changes that will reshape our world in ways we are only beginning to understand, we face the most unstable and uncertain geopolitical environment in decades. In the continued absence of restored credibility or new forms of cooperation among the great powers, geopolitical volatility and uncertainty look to be among the defining features of global politics for many years to come.