New cold war looming

Trade talks between Washington and Beijing, aimed at defusing escalating tensions between the world’s No. 1 and No. 2 economies, are at risk amid latest threat from President Trump of additional tariffs on $200 billion of Chinese imports. The Chinese government has vowed to hit back and made clear that China would never negotiate with a “gun pointed to its head.”

The rivalry between the United States and China, however, is more than just a trade dispute. At its heart, the current trade dispute is a wake-up call, a warning sign of the broader and strategic conflict between the two major powers.

“As China and the U.S. dig in their heels in the spiraling trade conflict,” warns Stephen Roach, former chairman of Morgan Stanley Asia, “the world may see the onset of a new cold war… It could be a new cold war because the U.S. is after containing the biggest threat that it faces as a global power, China.”

The growing trade tension is merely an indicator that the two great powers have already fallen into the Thucydides Trap, the idea that an incumbent power’s anxiety of a rising power may explode into armed conflict.

For Beijing, report Shi Jiangtao and Owen Churchill of South China Morning Post, “there is a new resolve that sees the trade conflict as part of Washington’s design to temper China’s rise to greater power. While Beijing is still willing to continue engaging the U.S., the earlier optimism of finding a quick solution has been replaced by a grittier determination… More than tariffs, China sees trade war as a new U.S. containment tactic.”

As People’s Daily, Beijing’s mouthpiece, disclosed, “A review of the trade negotiations with the U.S. shows the American government has been inconsistent, ambivalent and capricious. But the behind-the-scenes logic is rather clear – it is never just about narrowing trade deficits, but to contain China in much broader areas. The U.S. is seeking hegemony, and China must be determined to fight.”

For Washington, China’s two ambitious programs, Made in China 2025 and One Belt, One Road, constitute a direct challenge to America’s national and global interests.

The objective of Made in China 2025, says Kristen Hopewell of University of Edinburgh, is for China “to become a major competitor in advanced manufacturing, a sector dominated by high-income, developed countries such as United States… Made in China competes with Made in America. It will bring China increasingly into direct competition with the United States, which is why Trump has explicitly stated the proposed U.S. tariffs are designed to impede the Made in China 2025 program.”

Beijing’s other massive program, One Belt, One Road, writes John Mauldin of Forbes, is “China’s mercantilist version of the U.S.-led postwar Marshall Plan. The Marshall Plan carved out leadership via institutions and trade agreements, while at the same time supplying much-needed money. Now China seeks to do the same by physically connecting itself with the Eurasian continent. China’s main strategic challenge is that the U.S. controls the seas. Geography means China’s imports and exports must traverse coastal bottlenecks the U.S. could easily close if it wished. That’s intolerable if your goal is to be a superpower, and that’s definitely what China wants.”

“One Belt, One Road is the answer,” noted Mauldin, “it will link the Eurasian landmass into a giant trading bloc… The project will open land routes the U.S. cannot interdict, the same thing is true for the project’s ocean and seaport aspects, thereby letting China take what it feels is its rightful place of leadership… The scope is breathtaking, but Beijing is determined to make it happen.”

As both leaders promised to make their countries “great again” and both countries positioned to stand firm, the current brinkmanship over tariffs could easily lead to grave consequences and a cold war between the two great powers is looming on the horizon.

A new cold war between the United States and China, however, may not end the Soviet way – a tumbled wall and a dissolved empire. China is no Soviet Union. “China’s economy is growing at twice the rate of the global economy,” writes Will Saetren at the Institute for China-America Studies, “and by 2028, is likely to dethrone the U.S. as the world’s largest economy as measured by GDP. It is highly unlikely that the Chinese system will fade into obscurity… China’s economic strength, coupled with its military might, make the U.S. containment strategy much more dangerous this time around.”

Xiaoxiong Yi is director of Marietta College’s China Program.

COMMENTS