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US-China Rivalry

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US-China Rivalry

Strategic competition or a cold war? 

Is there a cold war between the United States and China? 
Short answer: No, but it is complicated.
The long answer is as under:
We should first clarify what we mean here. “Cold War” is a very specific historical term that has been conscripted as an analogy to describe what is going on between the United States and China.
And it should not be. Chinese academics themselves don’t use the term “Cold War” to describe their current rivalry with the United States. They, instead, use the term “Competitive Coexistence”. This is a far less hawkish term than what the Americans are using. And it’s a correct one as well.
What the US and China have is a rivalry. This is incredibly different from what a cold war is. The cold war in the US meant an overall foreign policy that was zero-sum. There was no space for coexistence with the Union of Soviet Socialist Republics (USSR). It was an entity that was considered (at least initially) weak and destined to be destroyed over time by the US if it pursued certain policy actions such as “containment”.
Rivals, however, compete with, not destroy, each other.
The use of the term “cold war” as an analogy to describe the current state of US-China relationship comes specifically from policymaking think tanks in the US. Even US historians reject using it as either an analogy or a framework for defining this relationship.
These US policymakers are holdovers from the Cold War era who seek to beef up their profile and maintain relevance in the 21st century by drawing parallels between the US-USSR cold war and the current US-China relations (perhaps hoping for renewals of their tenure). Kissinger, the current war criminal in the US hire, is one of the biggest proponents of using “Cold War” to describe US-China relations (“We are in the foothills of a new cold war” is what he said).
If the US chooses to let these holdovers define the country’s policy towards China today, then it won’t be any surprise if it creates a self-fulfilling prophecy and drags the US into an unnecessary confrontation with a rival that never needed to turn into an escalated conflict.
The other major error of using the Cold War as an analogy for the current US-China relations is because the context of the Cold War was so astronomically different from what you have today that it’s lazy and criminally irresponsible to apply this analogy to US-China rivalry unless you are Bolton and want war. Here are a few points to ponder over: 
1. The Cold War occurred in the aftermath of nearly 30 years of two major global conflicts and a Great Depression. Current US-China relations are in the aftermath of 30 years of peace, though under the declining US Hegemony.
2. The Cold war was in the aftermath of 30 years of rising tariffs and closed economic systems. Currently, we are seeing downward trends in tariffs overall and open economic integration.
3. The Cold war was in the aftermath of 30 years of the USSR’s economic isolation. Currently, the US-China rivalry is under the shadow of 30 years of Chinese economic presence in the global economy.
4. The Cold War was in the aftermath of vast destruction across Europe and Asia with Germany and Japan completely decimated and occupied. China was in a civil war. Huge vacuums of power surrounded the Soviet Union. And in these vacuums of power, massive revolutionary and decolonization movements were emerging that were ridding the old powers of their holdings in the soon-to-be ex-colonies.
Today, China is surrounded by a resurgent Japan, a major regional power in the form of India, an assertive Russia and a wealthy, industrialized South Korea.
5. The Cold War came when capitalism was in disrepute as it was blamed for two World Wars and a Great Depression. French and Italian communist parties were on the verge of winning elections in their respective countries. Marxist-Leninist ideas and central planning that led to rapid economic growth and industrialization were immensely popular as ideas in revolutionary movements sweeping across Asia and Africa. The Cold War was under the shadow of socialism’s mass appeal. The Labor party was voted into power in the UK as it called for the nationalization of major industries and the implementation of social welfare programmes. The USSR had vast ideological appeal as an entity promoting social justice and equality. 
This is not what the case is today. China does not offer the ideological appeal of the same kind and its message is one of nationalist, not globalist, ethos: “Socialism with Chinese characteristics”.
6. The geostrategic threat today is completely different. Back during the Cold War, the key policy message was: that the US must not allow an adversary to gain power in Europe and Asia. This is because, during WWII, Germany’s and Japan’s conquest of vast land holdings in Europe and Asia allowed them to amass enormous resources, industrial material and human labour that allowed them to wage an effective war against the US. The USSR after WWII appeared to be able to present the same threat as its ideological appeal in vast power vacuums, its military strength and (then) impending US withdrawal from Germany and China appeared to give it a close chance of gaining control of similar vast economic resources.
This is not China. It is nowhere near the same geostrategic threat as the USSR during the 40s and 50s. The South China Sea islands are not the same as the USSR’s contest for power in Poland and Romania. The Spratly Islands dispute is not the same as the tense movements to control Germany.
7. The risks taken during the Cold War were much larger due to the higher stakes (control of Europe and Asia) at play. Containment of the USSR as a policy was pursued due to the belief that it was making major inroads across the world, especially when China fell to the Reds after the Chinese civil war ended.
This is not what China is doing today, nor can it do this today.
8. The Cold War, being a rivalry of political and economic systems, also resulted in the US and USSR competing to form systems that improved the quality of life for their citizens so they could showcase the ideological appeal of their citizens over the others. George F. Kennan – a career Foreign Service Officer, formulated the policy of “containment,” the basic United States strategy for fighting the cold war – himself stressed that the US needs to demonstrate, at a time when democratic capitalism was considered weaker than communism and central planning, that Japan, Germany, the US and the UK could establish democratic capitalism and improve the lives of their citizens immensely. The USSR was doing the same with Communism and Central Planning.
The US has not responded to the rise of China by somehow trying to adopt policies that improve the lives of their citizens at a time when their political institutions are faltering, mostly because they don’t see China’s system as having vast appeal beyond their borders.
The two axioms of the Cold War that drove the containment policy of the US towards the USSR were:
a. The US and USSR were such ideological opponents that there could be no coexistence between them. Both believed the other was out to destroy their way of life. Kennen believed that the USSR was fundamentally a weaker entity that would back down in the face of strong US resolve and containment.
b. Neither of these is true today. China is not seeking to destroy the US way of life nor is it weak as an entity the way the USSR was (at least that’s what Kennen believed based on his observations of the inner workings of the USSR’s economy and political system).
The Cold War was also something that integrated ideology, geopolitics and economics into one overarching struggle between the USSR and US. The USSR was also feared as a threat by the US because it was able to create massive geopolitical opportunities due to its immense ideological appeal. And the USSR had intentions to exploit those geopolitical opportunities.
To think that China has a similar ideological appeal across the globe that can be exploited as geopolitical opportunities is almost delusional. 
Similarly, Kennen believed that the US could push ahead with major risks like the Berlin Airlift and containment because: 
1. He believed the USSR was much weaker; 
2. The US had a nuclear monopoly; and
3. There were no economic interconnections between the US and USSR.
While China’s military still lags behind the US, to an extent, all three of the above are not true today. And to base US risk-taking off of them with respect to China is a major disaster waiting to happen. Instead of realizing the fundamental common interests between the US and China on preventing pandemics, curbing the spread of nuclear weapons, preventing a conflict in Korea or South Asia and combating climate change, this Cold War analogy sets both up for an unnecessary conflict.
To double down on the above points about how the Cold War analogy is so false, we need to acknowledge that the period of the Cold war was the tail end of a period when the world was gripped by major insecurities due to scarcity.
We seem to have forgotten about Malthusian ideas that the world population was growing so rapidly and so out of pace with agricultural output that we would soon face global starvation on an unprecedented scale.
There were massive wars of conquest over land and resources during this period of time, with ideology serving as the mobilizing basis for such conflicts, all the way from the French Revolution to the 1960s and 70s.
As Dr. Francis Gavin puts it, this period of scarcity and crises has been replaced since then by a period where the problem is a problem of plenty. We have too much now. Whether it’s the climate change crisis (rooted in too much industrialization and consumption), the obesity crisis, the opioid crisis.
So the institutional framework or the political institutions that were developed during the cold war or that rely on the cold war as an analogy will look at the world through the lenses of great power conflicts that were fueled by scarcity.
Which is not the nature of our world today and the nature of the US-China rivalry. Why wouldn’t you use political institutions here to resolve these issues that are geared to deal with the problem of too much consumption, too much information, too much free flow of money, too much trade and so on?
I might be beating a dead horse at this point but I just want to give an example of how dangerous it can be and how badly the US can get it wrong if they frame the China of today with the same cold war lens as the 1945– 1991 period.
For this example, let’s take Hong Kong.
If it was the 1950s and the Chinese wanted to take Hong Kong, they probably would have just invaded and taken over. They had the military muscle and proximity for it.
So why doesn’t modern-day China do that as well?
Hong Kong is one of the 3 primary capital markets in the world today besides NY and London. It’s the go-to place in the world when you want to raise significant capital.
The primary power of Hong Kong is the trillions of dollars in capital that the Hong Kong Banks sit on and its draw as a financial center in the world. It’s the fact that Goldman Sachs is there. It’s the fact that if you’re an exec in the financial world, you would probably choose to live in Hong Kong and raise a family there cause its a great city and it has a powerful, well-integrated financial system there.
Invading Hong Kong means Goldman Sachs leaves. It means capital flight. It means no more fancy bankers choosing to live there.
The CPC knows this which is why all of its political moves toward Hong Kong are carefully calibrated to ensure Hong Kong’s capital stays put and it remains a financial center. Because the CPC is under no delusions that if that money leaves, it’s gonna come to Shanghai. It won’t, It’s gonna go to London or NYC. Which the CPC wants to avoid at all costs.
Think of this for a minute and understand how differently the CPC is acting here compared to the CPC that was dealing with Taiwan during the island crises of the 1950s.
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