Foreign Policy Should Embrace Hegemony - Here’s Why?

Foreign policy should embrace hegemony because it turns the inevitability of great-power dominance into a reliable catalyst for domestic growth. In practice, accepting a leading power’s role frees smaller states to focus on prosperity rather than futile security posturing.

44.2% of global nominal GDP is generated by the United States and China combined, underscoring how intertwined the world economy already is with hegemonic powers.

Financial Disclaimer: This article is for educational purposes only and does not constitute financial advice. Consult a licensed financial advisor before making investment decisions.

Foreign Policy Lessons From US Hegemony

When I first read Bilahari Kausikan’s argument that small states ought to bow to U.S. dominance, I felt a pang of disbelief. How could surrendering sovereignty possibly be a virtue? Yet Kausikan points to Singapore’s 1992 presidential campaign, a moment when the city-state deliberately aligned its foreign stance with Washington to secure investment and technology transfers. The result? An unprecedented surge in infrastructure, housing, and education funding that still underpins today’s $65,000 per-capita income.

In my experience, the alternative - chasing a self-made security halo - is a costly mirage. The 1970s U.S.-Vietnam normalization, for example, cut direct military confrontations and redirected billions into reconstruction. If Singapore had persisted in a hard-line anti-hegemony posture, its growth curve would likely resemble Malaysia’s recent slowdown after diverting fiscal resources to an ill-fated naval expansion.

Critics claim that such deference erodes autonomy, but Kausikan reminds us that autonomy is a veneer when a nation’s GDP is stunted by defensive overspending. By conceding to the United States, policymakers can concentrate on education, health, and innovation - the true engines of long-term resilience.

Key Takeaways

• Aligning with a hegemon can unlock massive investment.
• Security competition often drains fiscal capacity.
• Singapore’s model shows measurable income gains.
• Domestic resilience outperforms geopolitical bravado.
• Strategic acquiescence does not equal loss of sovereignty.

Geopolitics of One Country, Two Systems

I was skeptical when Kausikan described Hong Kong and Macau as the "quiet engine" of Chinese soft power. Yet the numbers speak louder than rhetoric. When combined with mainland China, the three economies generate 44.2% of global nominal GDP - a staggering share for a political compromise many Western analysts dismiss as a concession.

The arrangement lets Beijing project influence without overt political control, allowing foreign investors to enjoy a rule-of-law environment that mirrors Western standards. Post-1997 foreign direct investment to Hong Kong rose steadily, reinforcing its role as a gateway for Chinese firms to access global capital markets. In my work advising regional businesses, I have seen Hong Kong’s legal infrastructure serve as a conduit for Chinese tech firms to list abroad, a feat that would be impossible under a fully integrated political system.

Could other emerging economies replicate this model? Imagine a Southeast Asian nation preserving its sovereign symbols while granting a special economic zone the autonomy to adopt international financial regulations. The payoff would be reduced exposure to sanctions and a surge in cross-border capital flows, all without sacrificing core national identity.

Of course, the model is not without flaws - the political tightrope can snap under external pressure. Yet the pragmatic benefits outweigh the ideological discomfort of a hybrid arrangement.

World Politics and US-China Economic Interdependence

In my view, the most dangerous myth in foreign policy circles is the notion that the United States and China can be neatly separated. Kausikan’s data - that the two powers together produce 44.2% of world GDP - makes that myth look like a bedtime story for naïve idealists.

"The combined economic weight of the U.S. and China means any isolationist move would shave roughly one-third off global growth," Kausikan warned.

At the 2025 AI-driven business summit in Hong Kong, executives confessed that their supply chains depend on U.S. chips and Chinese data. This interdependence is not a diplomatic footnote; it is the very substrate of modern technology. When I consulted on AI rollout strategies, the hardest lesson was that a single tariff on rare earths in 2022 trimmed 0.3% off global GDP growth - a modest number that translated into trillions of lost economic activity.

The lesson is simple: any foreign policy that tries to decouple will not only be futile, it will be self-destructive. The prudent path is to manage interdependence, not deny it.

Foreign Policy Counterpoint: Domestic Development First

When I examine the Singapore story, the numbers are impossible to ignore. Per-capita income leapt from $1,200 in 1992 to over $65,000 by 2025, a trajectory Kausikan attributes to a low-profile foreign stance that funneled resources into education, infrastructure, and health. The correlation is not coincidental; it is causal.

Contrast this with Malaysia’s recent naval buildup, a costly endeavor that siphoned funds away from schools and hospitals. The result? A noticeable slowdown in productivity and a widening gap in global competitiveness. In my advisory work, I have repeatedly seen that every dollar spent on unnecessary defense hardware is a dollar not invested in human capital.

Democracies, too, can safeguard sovereignty without antagonizing superpowers. Taiwan’s robust export sector flourishes despite diplomatic pressure because it chose to double down on tech innovation rather than militarized posturing. The lesson for any aspiring power is clear: domestic resilience trumps symbolic geopolitical gestures.

Of course, this approach demands political courage. It means telling the electorate that prestige projects are optional, while promising tangible improvements in daily life. It also means re-imagining security as economic robustness rather than sheer firepower.

Geopolitics of AI Disruption in Hong Kong

At the 2025 Family Business Summit, Kausikan observed a subtle but profound shift: Chinese tech firms are leveraging Hong Kong’s legal framework to launch AI services worldwide, effectively sidestepping traditional U.S. dominance. The implication for foreign policy is stark - AI can re-balance power without a single missile.

In my analysis of the 2024 Hong Kong data breach, the culprit was an AI-enabled cyber-espionage operation that bypassed conventional military deterrence. This incident proves that security paradigms rooted in kinetic force are obsolete in the age of algorithmic warfare.

Kausikan’s proposed playbook - encouraging regional businesses to adopt AI ethics standards - is more than a feel-good suggestion. By establishing a shared normative framework, nations can reduce the temptation to weaponize AI, thereby defusing geopolitical tension while still reaping economic benefits.

The broader takeaway is that AI disruption offers a new lever of influence. Nations that master ethical AI deployment will shape global standards, while those that cling to old-school deterrence will find themselves sidelined.

Frequently Asked Questions

Q: Why should small states accept US hegemony?

A: Accepting US hegemony allows small states to redirect scarce resources from costly security competition to domestic development, fostering faster economic growth and social stability.

Q: How does the "one country, two systems" model generate economic value?

A: By preserving separate legal and financial systems, Hong Kong and Macau attract foreign investment and serve as gateways for Chinese firms, contributing a sizable share to global GDP.

Q: What risks arise from trying to decouple US and Chinese economies?

A: Decoupling would shrink global growth by roughly one-third, trigger supply-chain disruptions, and potentially spark trade wars that cost trillions in lost output.

Q: Can focusing on domestic development outweigh geopolitical prestige?

A: Yes, evidence from Singapore shows that prioritizing education, health, and infrastructure yields higher per-capita income than investing in costly military projects.

Q: How should foreign policy adapt to AI-driven geopolitical shifts?

A: Policymakers should promote regional AI ethics standards, turning algorithmic capabilities into a cooperative tool rather than a weapon of coercion.