Ditching the summit marks a dramatic turn in China's foreign policy. For the past several years, Xi has apparently sought to make China an alternative to the West. Now Xi is positioning his country as a full-on opponent—ready to align its own bloc against the United States, its partners, and the international institutions they support.

Xi's break with the establishment has been a long time coming. His predecessors integrated China into the U.S.-led global order by joining its foundational institutions, such as the World Bank and the World Trade Organization. For much of his tenure over the past decade, Xi has kept a foot in the door to that Western order—even as China's relations with the U.S. have deteriorated. China even participated (though grudgingly) in G20 efforts to help alleviate the debt burden on struggling low-income countries.

But over the course of his rule, Xi has grown hostile to the existing order and intent on altering it. He has focused on developing alternative institutions that Beijing could lead and control. Xi formed the Asian Infrastructure Investment Bank to rival Washington's World Bank, for instance, and promoted competing international forums, such as the Shanghai Cooperation Organization, whose membership includes Russia and Iran.