What we know about the new Cold War
The American astronomer, Carl Sagan, put it well: ‘Where we have strong emotions, we’re liable to fool ourselves.’ To deal with this very debilitating—if very human—impediment, before making any definitive political risk statements, I try to blow the emotional cobwebs away by playing an invaluable game called ‘What We Know.’
‘What We Know’ is an effort to separate fact from fiction, to clear away the intellectual wheat from the chaff, leaving us with facts, rather than prejudices, by separating the two. The only way to do this is to see the world precisely as it is, and not how we might wish it to be.
And, given the obvious and proven Chinese wickedness in condoning the spread of the coronavirus in the fateful months of December 2019-January 2020, a game of ‘What We Know’ about the brewing Sino-American Cold War is desperately called for.
First, we know that the pandemic did not bring about the Cold War. Long before these virulent controversies erupted, China’s piratical land grabs in the South China Sea and the Trump administration’s dissatisfaction with the established Sino-American trading regime made it clear that a major geopolitical conflict was brewing.
Indeed, in January 2020, in my firm’s yearly prediction column for CityAM, our very first prognostication was that the Sino-American Cold War would be the defining geopolitical feature of the new era.
Beneath the surface, the Cold War is driven by a series of world historical forces. There is the structural angle to things, that in a world with one primary rising power and one established great power, conflict between the two is likely, as has proven the case since Athens and Sparta over the Peloponnesian War.
The far more aggressive foreign policy of Xi Jinping, a repudiation of Deng Xiaoping’s earlier efforts to quietly obscure Chinese power, has also made a Cold War far more likely.
Whether it is Chinese encroachments in the South China and East China Seas, the gigantic, Marshall Plan-style Belt and Road Initiative (BRI)—designed to enmesh Beijing as the dominant economic force on the pivotal Eurasian landmass – or Xi’s very public crackdown of dissent in both Hong Kong and Xinjiang province, the combination of factors made increased tensions with Washington highly likely.
So this we know: A Sino-American Cold War was already on the cards, but the great controversy over the Covid-19 pandemic has set these simmering tensions alight.
The good news is that by every measure, the US and its western allies ought to prevail in such a contest for global power. China’s only significant would-be ally is Russia. Indeed, the only possible military challenge to the US is a far closer fusion between Moscow and Beijing.
But this is unlikely to happen, given that President Putin’s continued popularity rests almost entirely on being seen as the ‘good Tsar,’ the embodiment of Great Russian nationalism. To play second fiddle to China (as in any tighter alliance he must) is anathema to both his instincts and his political power base.
Internally, too, China has a raft of problems, ranging from increased over-dependence on inefficient State-Owned Enterprises (SOEs), to the country’s utterly disastrous ‘One Child Policy.’ Put simply, due to this self-inflicted gaping demographic wound, China is likely to get old before it gets rich.
Yet a last ‘thing that we know’ cautions us against over-confidence. While it is true China has few real friends, and a number of intractable internal problems, the US must be very careful not to fritter away its primary advantages of having the world’s most dynamic economy and being at the centre of an unparalleled alliance system.
Which brings us nicely to Donald Trump. His early decision to walk away from the Trans-Pacific Partnership (TPP), an ambitious free trade agreement encompassing much of non-Chinese Asia, looks even more catastrophic in retrospect. It amounted to a missed chance to establish a broadly pro-western, pro-democratic trading regime in Asia, the source of most of the world’s future economic growth.
And while the president is entirely right to take feckless Europeans to task for irresponsibly under-spending on defence over decades, in his obvious vitriol toward America’s allies he has endangered the alliance system that is a major source of the US’s geostrategic advantage.
This is what we know about the contours of the Sino-American Cold War. All American policy measures from here on out should use this strategic outline as our map, mitigating western weaknesses and exacerbating those of Beijing. This will be history’s yardstick of success or failure. And we must not fail.