Dr Naoise McDonagh, in his 2025 article “US–China Competition, World Order and Economic Decoupling: Insights from Cultural Realism,” published in the Australian Journal of International Affairs, offers both a theoretical and empirical reappraisal of a defining tension of our time: the evolving US–China rivalry and its impact on the international economic order.
Drawing on the emerging framework of cultural realism, McDonagh challenges existing theories of hegemonic stability by arguing that deeply rooted political- cultural differences—rather than simply material interests—are the primary drivers of intensifying economic decoupling and global fragmentation.
The article is set against the backdrop of a multipolar economic system in flux. McDonagh critiques the “dual hegemon” thesis, which assumes that shared economic interests will sustain U.S.–China cooperation in maintaining global public goods like open markets and trade institutions. Instead, cultural realism provides a more compelling lens, rooted in the ideological clash between American liberalism and Chinese Marxist-Leninism, which McDonagh argues fundamentally constrains strategic cooperation.
This theoretical claim is substantiated through analysis of political discourse and institutional practice in both countries. For McDonagh, political culture is not an epiphenomenon but a causal force shaping how states interpret threats, form strategic preferences, and engage
with the international system. In China’s case, he identifies a fusion of ancient civilisational values and Leninist ideology that continues to guide its interactions with liberal institutions. Market reforms are framed as pragmatic, not ideological, serving the long-term aim of advancing socialism rather than embracing liberal convergence.
This argument is underpinned by a close reading of official texts, including China’s 2017 Communist Party constitution and the 2021 historical resolution issued by Xi Jinping, to
reveal deep-seated suspicion of liberal democracy and insistence on the Party’s ideological supremacy. Liberal norms—like multiparty elections—are viewed as alien and existential threats to regime legitimacy. Thus, China’s participation in institutions like the WTO is seen as instrumental, not norm-driven—serving domestic stability and state-led development.
On the U.S. side, McDonagh traces a growing bipartisan consensus—from Trump’s 2017 National Security Strategy to the Biden administration’s 2023 statements—that economic engagement with China has failed to liberalise Beijing. Instead, American policymakers now view China as a revisionist power seeking to reshape the global order in its own image. This ideological divergence, McDonagh argues, has contributed to the securitisation of trade and investment policy and the emergence of a distinct geoeconomic paradigm.
Two pieces of legislation—the Inflation Reduction Act (IRA) and the CHIPS and Science Act— are presented as case studies of this shift. Both seek to redirect U.S. industrial capacity from China to domestic or allied supply chains. The IRA, in particular, includes local content
requirements and subsidies that not only violate WTO norms but deliberately exclude China from key sectors like electric vehicles and battery manufacturing. These policies, McDonagh argues, mark a clear departure from multilateralism and reflect strategic economic nationalism.
The article emphasizes that this shift spans administrations. While Biden paired subsidies with diplomacy, a Trump return in 2025 could escalate unilateralism through tariffs and coercive trade tactics. McDonagh highlights a consistent view across administrations:
interdependence with China is seen as a liability, not a stabilizer. As a result, the vision of a cooperative, rules-based order under joint U.S.–China leadership appears increasingly implausible.
The article concludes by arguing that we are entering a period of “fractured globalisation”, where the traditional multilateral economic order coexists with a security-driven,
ideologically bifurcated system. This dual system presents serious governance challenges, requiring new approaches to risk management, policy coordination, and intellectual
engagement. By foregrounding the role of national political culture in shaping threat perceptions and institutional behaviour, McDonagh offers a compelling alternative to
theories grounded solely in material interests. His work calls on scholars and policymakers to take ideology and identity seriously—not as residual factors, but as primary forces shaping the contours of international economic life.