The New Cold War (eBook)

Introduction

On 1 February 2023, Chase Doak, editor of the Billings Gazette, was scanning the clear blue sky above Billings, Montana, when he spotted a strange white dot, hanging there, stationary, like a daytime star. With the help of the Gazette photographer’s long-range camera, he saw it was a balloon. This giant descendant of its nineteenth-century forebears had been kitted out by China’s People’s Liberation Army (PLA) with a twenty-first-century payload of technology and a solar power array the size of three school buses. It was a shocking apparition, even though it posed no threat to people on the ground and, as a tool for aerial surveillance and signals intelligence, its impact was hotly debated.1

Nevertheless, the sheer brazenness of its intrusion over the American Midwest, near silos of the country’s arsenal of land-based intercontinental nuclear missiles, triggered a volcanic reaction in the US Congress. Republicans accused the Biden administration of failing to defend US skies. Democrats decried a deeply hostile act by America’s communist rival, despite the likelihood that the balloon had simply veered off course. By 4 February, once it had drifted over the South Carolina coast, President Biden ordered the slow-moving and defenceless intruder be shot down – by an F-22 fighter capable of flying at nearly two and a half times the speed of sound and hitting targets over 150 nautical miles away. The brutal mismatch of power provided a convenient distraction in Beijing from the embarrassment of the balloon’s discovery. The Global Times, mouthpiece of the Chinese Communist Party (CCP), wrote that it was like ‘shooting a mosquito with a cannon’.2

The ‘balloon incident’ exposed for all the toxic state of US–China relations and the deep anxieties on both sides. US and Chinese governments have long engaged in aerial surveillance, but mostly through satellites in invisible geostationary orbit, or through equally invisible digital penetration of each other’s databases and national security infrastructure. It took the balloon, and the subsequent revelation that it was far from the first to traverse the US and its allies in the Asia–Pacific, to awaken US citizens to the scale of the growing contest.

It also served as a reminder of the ambiguities that riddle the relationship. Once the downed balloon was pulled to the surface off Myrtle Beach and the entrails of its payload dissected, they were found to contain US dual-use chips and other components; just as dismantling the F-22 that shot down the balloon would likely reveal Chinese-sourced micro-electronics and rare earth minerals buried inside its avionics and missiles.3 This is hardly surprising. After China’s entry into the World Trade Organization (WTO) in 2001, US–China economic relations grew exponentially. Chinese companies supplied American consumers with well-produced and low-priced everyday goods and US companies with low-value but essential components. US companies supplied China with iPhones, computers and advanced semiconductors, as well as food and fuels. And both sides invested in each other’s economies, from established companies to start-ups.

But within ten years, political relations had begun to deteriorate, especially after the rise to power in 2012 of the more authoritarian and externally assertive CCP General Secretary Xi Jinping. Leaders in Washington and allied capitals in Europe and the Asia–Pacific have come to the realization that China’s growing economic power has translated into greater capacity for the CCP to quash any dissent or possibility of political pluralism inside China. And that they have been helping China on its journey to greater military-technical self-sufficiency, which in turn is empowering China to challenge them abroad. Since 2013, there has been a growing catalogue of near misses between Chinese and US aircraft and naval vessels patrolling the contested skies and seas around Taiwan and Southeast Asia. Any one of them could have easily resulted in deaths of servicemen and a far more dangerous fallout than from the balloon incident.

The last ten years have ripped the veil from the notion that closer economic relations between the US and China could be insulated from these growing political tensions. The hope was that, unlike the US and the Soviet Union, the US and China could each grow stronger together. Instead, they have slipped into what was first termed in 1951, four years after the start of the last Cold War, as the ‘security dilemma’, whereby the actions by one side to increase its security engenders new insecurity and counter-reactions in the other, pulling both into an inescapable vortex towards war.4 Four-star General Mike Minihan, head of the US Air Mobility Command, even warned in a memo in January 2023 that the US and China are on course to ‘fight’ over Taiwan in 2025. He is not the only senior member of the US military to have issued such warnings in recent years.5

Descent into the antagonistic, destructive rivalry that characterized the last Cold War could possibly be avoided by regular consultations, channels for crisis communications, and by agreements for military de-escalation and transparency. But the problem is that these two countries are on opposite sides of a profound and open-ended global competition between two political systems that are incompatible and mutually hostile.

As the Director of Chatham House for fifteen years, I travelled regularly to China to speak at conferences on international relations. I was always struck by my Chinese counterparts’ obsession with understanding the drivers of what they called today’s ‘great power competition’. Drawing on historical experience and the writing of American theorists of international relations, they believed they understood the central reason for US and Chinese competition: the rise of a new great power would inevitably be blocked by the existing great power, leading to what US academic Graham Allison first described in 2012 as the ‘Thucydides trap’, named after the Athenian general who wrote about the causes of the First Peloponnesian War in the late fourth century BC. Allison equates the US with Sparta, trying to resist the rise of China (Athens in Thucydides’ day), even if this leads to conflict.6

The solution, according to my Chinese interlocutors, was for China to demonstrate that it does not want to replace the US as the world’s dominant power, and for the US to accept China’s rise as its equal globally as well as in Asia. This would allow the two sides to co-exist peacefully and avoid a repetition of the world wars in the first half of the twentieth century, or of the Cold War in its latter half.

But I argued that they were missing the point. Sure, the security dilemma between the US and China could possibly be attenuated by confidence-building measures and negotiated frameworks for economic cooperation and competition. But we need to recognize that the conflict between the two sides is also ideological. It is rooted in the fear that the leaders of two very different political systems have of the other. The single-party system represented by the CCP rejects any internal challenge to state power, while the liberal democratic system championed by the US places checks and balances on state power, and the rights of the individual are at its centre. The United States and China have different visions not only for the best form of domestic governance, but also for international order. Both want their system to dominate the twenty-first century.

This is why they are now engaged in a contest that is global and unbridgeable. Why we have entered a new Cold War and are no longer just in its foothills.7 Why this Cold War’s tinderbox is Taiwan, a democratic outpost next to the communist behemoth. Why its two protagonists are working so hard to draw allies and friends to their side from across the world, especially countries outside the northern hemisphere that together constitute what is now called the Global South. And it is why the contest encompasses all major instruments of statecraft: diplomacy, technology, military power, intelligence, foreign aid, culture and, critically, trade and investment. After all, if two well-matched and nuclear-armed powers are involved in such deeply rooted rivalry, then the battle for economic and technological supremacy will be paramount, and companies will be on the front line, whether they like it or not.

We stand at the very beginning of the New Cold War, with no sense of how or when it will end. Russian President Vladimir Putin’s rash decision to undertake a full-scale invasion of Ukraine on 24 February 2022, and Xi’s decision to remain faithful to the spirit of the declaration that he signed with Putin just before the invasion stating there are ‘no limits’ to the friendship between the two states, have welded China to Russia in a conflict with no discernible solution.8 It has also knitted America and its European and Pacific allies together in opposition. The March 2023 agreement between the United States, Australia and the United Kingdom to develop cutting-edge dual-use technologies, including a new fleet of Australian nuclear-powered submarines to patrol the Pacific, measures its milestones in decades, not years.9 Meanwhile, President Xi has set 2049 as the target for China to complete its process of national ‘rejuvenation’ and to overcome America’s policy of ‘all-round containment, encirclement and...