Are the US and China headed for a new Cold War, or will it be a hot war? Let us find out in this article at The News Engine.
The downward spiral began years ago, but it has really sunk to new lows following a pattern of knee jerk tit for tats in the last few days. Washington shut down China’s consulate in Texas last week, and in response, Beijing shot down America’s consulate in Chengdu. Thousands of Chinese watched as the US flag was lowered from the former diplomatic post. As part of America’s full-court, Press Secretary of State Mike Pompeo gave a speech asking the world to embark on a new cold war with China.
2 Countries – New Cold War Begins
The two countries already have a trade war. They have got new travel restrictions on each other, and they have banned each other’s journalists, among further escalations. So, where do we go from here from a strategic point of view? What are right smart moves should America be making?
President of Council on Foreign Relations Richard Hass has served many US presidents in the past and is a prolific writer on global issues in US foreign policy. He has just finished his book designed to help bolster Americans’ literacy about the world beyond their shores.
The book is appropriately titled ‘The World’. Richard recently wrote a critique on Secretary Mike Pompeo’s speech at the Nixon Library. In the book, he described that Pompeo misunderstood history; he misunderstood what Nixon and Kissinger were trying to do with China at that time. Hass believes that China’s suggestion of engagement policy had failed because it did not bring about a more open and liberal China politically or economically. Richard argued that the policy aimed to change Chinese foreign policy to work with China against the common enemy; the Soviet Union. And in fact, it succeeded in doing that. America won the cold war on terms that even an optimist would have had difficulty coming up with.
We believe that some were overly optimistic about what to expect once China was brought into the institutions. According to Richard Hass, America made some severe mistakes when China came to the WTO. The terms of their membership were overlooked as China’s economy began to grow.
China began to be integrated into the world, and America kept treating it as a developing country. But the primary thrust of policy, which is more traditional, was to influence Chinese foreign policy. The whole idea was to embed them in arrangements in the region so that, they would not be tempted to use military force. Either to change the status of Taiwan or to change the situation in the South China Sea. Hass argued that for four decades, the policy mostly worked.
As currently, Donald Trump is very fixated on China, and we are just a few months away from the election in the United States. Back when Barack Obama and Mitt Romney were running against each other, they talked about China being a currency manipulator every other day. They would talk about how China was creating new complications and problems in the world. It makes us question if the recent speeches are just election posturing or there is something deeper and more real in president Trump’s posturing on China? In a way, it is both. It is election posturing to some extent. There has been an attempt to blame China for recent problems, including the pandemic.
China ought to be criticized harshly for its behavior early on during the outbreak. Though once the pandemic reached our shores, it became our problem for what we have done and what we should have done. Taking a step back, it would be wrong to dismiss many of the US-Chinese relation problems, especially as the byproduct of the American political calendar and leaving them behind after November.
But that is not likely to happen. The existing issues are real, and they will be challenging either for President Biden or President Trump. It might seem counter-intuitive to some readers. It could be even more difficult for President Biden in the sense that he is unlikely to be as preoccupied as President Trump with the narrow trade deals. These deals were about expanding American exports to China. If it were to happen, China simply agreeing to agriculture and manufacture would make a significant change.
This clash is now somewhat rooted structurally in the bilateral relationship between the two nations, even if there is a government shift. Many people in the US have been consistently tough on China over human rights concerns and broad repression in the country. We should not just attribute it to President Trump or the American election. It is out there; it is real. Though there is one thing where we can make a big difference. Under President Biden’s rule, if it comes to that, his willingness to forge a standard relationship with American allies in Europe and Asia.
It has a bit of upside as it promises to put more pressure on China. Upon the Hong Kong issue, President Trump and Secretary of State Pompeo have expressed diametrically opposed views. What are we supposed to make of these mixed signals when it comes to China or when it comes to allies? Are they with us, or are they against us on this very problem?
There are very mixed signals about the US indifference on what China did in Hong Kong and with Uighurs. John Bolton has a book that basically has the Chinese president giving establishment free ride to do pretty much whatever they want to do with their citizens. It includes gross violations of human rights. It is one of the reasons this criticism by the Secretary of State seems like too little too late.
The fact that it is just aimed at China is peculiar, to say the least. We do not see any equivalent criticism of Russia or Turkey, or other countries. It makes the current criticism seem entirely opportunistic rather than principle. The first big foreign policy decision by the Trump administration was to hold back from the trans-pacific partnership. That would have put us together with countries representing at least another 20-25% of global GDP.
We could have developed much better economic standards with China in terms of trade and in terms of respecting intellectual property. It is challenging for the administration now to be claiming that they are robust in China. When in reality, it kicked away all sorts of opportunities to do so over the years.
America seems to be putting up barriers complaining but not necessarily moving towards fixing problems. Based on Trump’s statements and actions to this point, we can clearly see that he has a very negative view towards the US allies. Rather than seeing them as partners and force multipliers, he tends to see them as free riders or competitors. This administration really needs a different view, a fundamental change in their ideology on what allies and partners are supposed to be. We have to be willing to do things in partnership with them rather than to them.
We just can’t insist that they work with us against China or anybody else. We have to come up with a common front, which may mean that we put aside some of our economic differences as we have a greater priority on certain fronts. This is what strategy is all about, you establish priorities, you act in a disciplined way, and unfortunately, we lack that in the current administration.
US and China have economic interdependencies that are really profound, and we just can’t untangle them without staggering costs. So, how are the economic dimensions affected by US-China raising problems? Also, will this adversely impact the reserve currency status of the dollar? The idea that China and the US could decouple is simply not possible. China is too present in too many places in the US economy.
The economic relationship between the two countries is too elaborate and too extensive. The real question is, could or should we distance ourselves in particular areas i.e., high technology? The answer is ‘yes’; it might be a possibility. It raises the importance of competition-driven innovation. If the US doesn’t want anyone to buy a Chinese-led 5G system, you need to have an American or American-European alternative then. Right now, there just isn’t one. So, to sum it all up, the goal is not to have an absolute divorce.
On the other hand, there is not room for a total marriage as well. What we need is something that is a bit more in the gray area, which is possible. The role of the dollar is the second issue. That depends on many things, including American competence & perceptions, US approach at handling the dollar now, and pandemic-related problems. It is one of those problems that don’t end in a day; it is a gradual process. With time, we will start seeing the emergence of limited but various alternatives that would co-exist with the dollar.