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The new Cold War, with Chinese (and US) characteristics

Editorial by Alain Guidetti

The Cold War is returning to the central stage of world affairs. Less than 30 years after the end of the East-West conflict, confrontation has emerged again as the dominant factor of international politics. Indeed, from military to technology, to economy and to policy, years of cooperation have increasingly given way to zero sum narratives and behavior between two superpowers, the US and China. If history doesn’t repeat itself, as Twain is reputed to have said, it seems indeed to astonishingly rhyme. Despite the provisional cease-fire established between the US and China in the margins of the last G-20 Summit in Argentina, and the nice words exchanged between the two leaders, the trade war is well on course and due to last. It is part of a full-fledged power struggle involving an arms race, technological rivalry and political hostility. At play is the contest for dominance over East-Asian and global affairs, between a waning super power and an emerging giant. The 21st century Cold War might prove to be as risky as the previous one.

Comparison has its limits. The post-WWII Cold War implied a bipolar struggle for global supremacy between two nuclear superpowers (the US and the Soviet Union) based on ideological and military confrontation, and the subsequent division of the world in two blocs. Little economic interaction occurred between the blocs, and military confrontation was only peripheral, due to the threat of MAD (mutual assured-nuclear-destruction) on the central European theatre. Ultimately, the Soviet Union proved to be less of a super power and more of a fragile and declining empire.

When it comes to China, the winner of the Cold War is faced with a very different challenge. Still second to the US in all measures (economy, military, global influence), this meteoric rising power is very likely to surpass the dominant one in most of these measurements, in a matter of years rather than decades. Its unique mass gives it the privilege to defy all the odds of coming decline. More importantly, it has served the very order that Washington had promoted since WWII - and tremendously benefited from it. In short, instead of fighting an ideological struggle, it played the capitalist game even though it did not always respect its rules.

Thus, as long as China was relatively weak and self-centered, nobody payed serious attention to its economic and political behavior (except in 1989, over Tiananmen). Its admission to the WTO, in 2000, was unanimously welcome, as much as its presumed role of “responsible stakeholder” in the international order, as conferred by the then US Deputy Secretary of State, Robert Zoellick.

But now, China’s rise to the firmament rings all the bells in Washington and well beyond. And ironically, it is at the moment that America comes to realise that China is about to surpass it and challenge its supremacy that it turns its back to the very order it had set up after WWII in order to secure its own preeminence. Reversing seven decades of US policy, the current US president has emphatically embraced the sirens of protectionism, nationalism and unilateralism, under the “America first” slogan, while giving up leadership and systematically eroding the tenets of the international order, especially its multilateral institutions and frameworks (e.g. WTO, the Paris Agreement on Climate Change, the Iran Nuclear Agreement, the UN Human Rights Council Human Rights, etc.). In parallel, the US president has questioned and weakened the US network of military alliances aimed at securing its dominant posture, and withdrawn from projects designed to shape the socio-economic future of Asia (e.g. the Trans-Pacific Partnership).

If America’s ire goes against a world order, the creation of which it presided, its real focus is on China. Under the pressure of China hawks in charge of trade and military affairs in the White House, Washington has come to consider China as a strategic rival that has to be not only contained but pushed back. Bilateral trade is a convenient channel of anger, since China hosts most of the gigantic deficit the US owes to the world ($375 bn USD of US trade deficit to China in 2017).

There are however precedents. America demonised Japan in the 1980s, as its tremendous economic rise was starting to threaten US economic dominance. Many were speaking of a “Japanese conspiracy” taking advantage of the US military umbrella to supplant it, and warned against a looming Cold War between the two allies. The economic stagnation of Japan since the 1990s put an end to these anxieties.

Where is Europe ?

Furthermore, the Americans have other, less mercantile and more structural, grievances. These are largely shared by the Europeans and Japan, inter alia. They relate to what they see as a lack of reforms in such issues as intellectual property theft and forced transfers of technology; restricted access to the Chinese market; the growing role of state owned enterprises at the expense of the private sector; cyber threat and influence, etc.

More importantly, many in the West and beyond consider that China under Xi JinPing has adopted a great power posture, by engaging into a relentless effort aimed at ultimately taking over leadership in world affairs. They suspect China is attempting to replace US dominance in all sectors from technology to economy, to global influence, and if not yet, military preeminence. They point at president Xi Jinping’s presumably limitless ambitions, as illustrated by his gigantic - and considered largely opaque - Belt and Road Initiative, designed to link China to Europe and Africa, while in parallel buttressing Beijing’s centrality in Asian and global affairs.

They also prevail themselves of the “Made in China 2025,” which aims at securing the dominant position for Chinese companies in cutting-edge technologies (A.I., chip-making, future wireless technology, driverless cars, etc.).  Furthermore, they consider with suspicion the increasingly centralised decision-making process in Beijing, centered around a Xi JinPing now endowed with limitless time in power, as well as further limitations to individual freedoms, and what they call an increasingly authoritarian rule.

If Europeans and Americans largely converge on the diagnostic, they profoundly differ on the cure. Europeans, which unlike the US don’t have strategic assets in Asia to support their claims, call for dialogue and negotiation with China, in order to help it pursue what it claims is its opening up and reform policy. Indeed, the Chinese leader has increasingly used this mantra himself in his public appearances, signaling his political willingness to move forward on a reformist course. But not everyone is convinced that his assertions are supported by the facts, even though some incremental changes are actually taking place,  for example, opening to foreign majority stakes in some joint venture companies.

The US has engaged into a much more confrontational posture toward China. The current trade war, which has been granted a recess of three months at the G-20 Summit, has projected the US-China economic relationships towards a possible decoupling track that some US administration hawks claim as a necessary move. Furthermore, in a speech by US Vice-President Mike Pence was seen by Americans themselves as a sign of a “new Cold War.” This recently threw a flurry of unprecedented public criticisms to China, including meddling in US midterm elections, political pressures on US institutions  and “economic aggression” (in particular, the forced transfer of “economic secrets”).

US – China decoupling

As counter-intuitive as a decoupling of US-China economic relationships may appear in an interconnected world, such an option is supported by hardline members of the US cabinet.  Thus, it is not anymore an implausible course of action, in particular in the absence of any clear US strategy towards China. This scenario would not only break the core tenet of the bilateral relationship, it would also tremendously impact the global economy, possibly causing a global recession.

Since the military and political dimensions of the US-China relationship already expose increasing divisions (on North Korea, Taiwan, the South China Seas, the Middle-East and other global challenges, alliances, etc.), very little remains to improve the relationship between the most important actors of the world affairs. That places the future of international relations in a bipolar world under dark auguries, possibly resembling the pattern of the 20th century Cold War.

Even the emergence of an ideological divide, which is, along with its nuclear dimension, the central feature of the 20th century Cold War, cannot anymore be discarded: the “Chinese model” of authoritarian development is rapidly emerging as a strong counter-narrative to the liberal model of development. In a world dominated by “strong men,” from Russia, to China, to the Philippines, to Brazil, to Venezuela, to Turkey, to Hungary, to Poland and many others, including the US, undoubtedly incentivises the “Chinese model.”. Such a global ideological divide would split societies along the lines of democratic versus authoritarian models. One would be inspired by China, but nobody can say for sure whether the US would lead the other.

Nevertheless, clear differences would persist between the models of Cold Wars in the 20th and the 21st centuries. Globalisation will not disappear, even if the US isolates itself. Most Western and non-Western powers, including China, will continue to support it. Furthermore, the new Cold War would likely not turn into a confrontation between blocs and military alliances, since the rest of the world will not want to take sides in a US-China axis of conflictual rivalry. But, unfortunately, nor will the rest be able to rein in the two nuclear superpowers in their struggle for dominance.