Has a ‘New Cold War’ between America and China begun?

Author: Behzad Taimur

The past week has been extremely eventful. At least two events have occurred that, going forward, are likely to have era-defining importance. The first of these is a summit of the G-7 that took place over last weekend at Cornwall in England. At the “Cornwall Summit”, leaders of the G-7, with the American president, Mr. Joe Biden, in the lead, announced a project to rival China’s Belt and Road Initiative. Called the “Build Back Better World” (or, B3W), this is supposed to be a global infrastructure development initiative that would seek to bring $40 trillion in finance into the Global South over the next 15 years. The second major event is a summit of NATO leaders that took place in Brussels on the preceding Monday. At this summit, NATO issued a communique that characterized China as a military threat.

Of the two, let us take up the NATO summit first. This is the first time ever that NATO has specifically named China as a security threat. One would recall that NATO was originally established in 1949 as a military alliance to counter the erstwhile USSR. After the breakup of the USSR, NATO maintained focus on Russia even as it evolved as a security alliance and began to work against numerous other threats. Now, the inclusion of China amongst its challenges is very significant. It follows also from the same communique that NATO is pivoting away from its Russia-focus. This should portend its sharpening focus on China. That is to say, one can see the beginning of a new evolution in NATO that may eventually have the alliance become entirely anti-China.

With that said, the B3W project is a slightly more nuanced event to look at. Foremost, one can see that the US and the G-7 have established an institutionalizing, multilateral framework within which they seek to compete against China. In turn, the B3W is being forwarded as an alternative choice to China’s BRI. Here, the China vs. US and allies rivalry had so far lacked a specific alternative that the latter were offering the world. Whereas, China offered aid, trade, investment, global integration and economic development, the US and allies had offered little more than allegations of mismanagement, corruption, “debt trap”, authoritarianism, et al. There was no coherent, institutionalized alternative to the BRI. Now there is – and it’s not just one country but a group of countries pooling resources together to create another offer. Now if China seeks to build a dam for an African country, the Americans can make a counter offer. In this, they can offer a larger dam or higher quality construction or, most notably, alternate financing terms. In this, B3W projects are expected to benefit from extensive financial institutions and financing mechanisms that the US and other rich G-7 countries already have in place.

So then, what does this mean? Does this mean we are looking at a “New Cold War”? Well, let’s look at what the Cold War was about. It was about two different political, economic and social ideologies. These were represented by the US and the USSR. These two competed against each other. The competition was political, economic and geostrategic. It had a very significant military aspect. In turn, the two built alliances (e.g. NATO or Warsaw Pact) to extend their influence and pool resources against the other. Ultimately, it boiled down to the economy – economic development, progress, prosperity, trade, aid, investment, et al.

Look at the US and China. Even though China has no avowed interest in global economic, political or social domination, and has taken pains to assure the world that it really does not, the US certainly seems to think that it does. In fact, the US was once a proponent of “engaging” with China economically. This was the Bush era and the US had supported China’s entry into the World Trade Organization in December, 2001. The view the former president Mr. George W. Bush held was that enmeshing China into the global economy would help “open” the country up and help the Global North gain influence there. Not only that this never happened, soon enough, China began to grow at a staggering pace, causing concern to arise in the Global North that it might begin to lose influence to China.

It was really the 2007 global financial crisis that very significantly changed things. Whereas the Global North went into recession, China not only weathered the storm but also maintained its impressive growth, signaling the first major shift in global order in the 21st century. It is hardly a coincidence that the US organized the so-called Quad grouping the same year. Just the same, China continued its march forward and held the Olympic Games in 2008, a historic military parade in 2009 and the World Expo in 2010. These three events can be seen as a major turning point in the China vs. Others competition. These events were coming-of-age moments that demonstrated to the world that China had really arrived on the world stage as an economic power with a robust military and a prospering society.

Soon after, in 2010, standing in Hanoi at an ASEAN summit, the then-US Secretary of State, Ms. Hillary Clinton, struck the first note of confrontation with China. Here, she challenged China on its strategic interests in the South China Sea, inaugurated a policy that still sees the US provide military and economic assistance to ASEAN countries to help them challenge China regionally and, most ominously, signaled the “Pivot to Asia”. What Secretary Clinton started, her president, Mr. Barack Obama, formally consummated in 2012 when he ordered redeployment of US military forces into the Pacific Ocean region. This can be seen as the beginning of an American “confrontation” with China. His successor, Mr. Donald Trump, not only maintained the earlier policy of redeploying forces to the Pacific Ocean, he expanded on it and began to move forces (and American diplomatic power) into the Indian Ocean as well. He is, however, best known for his trade war with China; his weaponization of US economic sanctions to punish it, including by targeting major Chinese corporations like Huawei; and his McCarthyesque scaremongering.

It is this context that brings us back to the present. Despite Chinese emphasis on its own economic development and on a peaceful global rise, the US has progressively moved from engagement (Bush era) to competition (Obama era) to confrontation (Trump era). And, then, it is this context that substantiates the next step up from confrontation: The institution of a New Cold War.

Beyond competition, the US has precipitated reorientation of its own military posture to now face China. It has also, last week, precipitated a reorientation in the NATO alliance to now re-focus on the same. At the same time, besides the “Quad” grouping, the US has now re-christened the G-7 as a new alliance that would seek to compete with China (and its BRI) through the B3W. It follows from the preceding that it would now thrust a choice between BRI and B3W upon the remainder of the world, and thereby force a more formal, global scaled regrouping of nations into one or another “camp”. In doing so, the US would offer the world a choice between variant projects, project types, partners, financial means and, ultimately, modalities of governance. These, in today’s world – that is quite dissimilar to the world of the 20th century – can be seen to constitute “ideological choices”, if not ideology.

Thus, in brief, the NATO summit in Brussels and the G-7 summit in Cornwall, have added several new dimensions to the on-going competition as well as confrontation between China and US and allies. In particular, these new dimensions are military, geo-economic and “ideological”. In turn, these are multilateral in nature; focus on alliances as well as alliance-building; and, would create, as a product of their inherent nature, rival “camps” globally. These dimensions were missing by measures from the competition and confrontation of preceding two decades. Yet, all the boxes are now checked. Therefore, we can now say that officially a New Cold War has begun.

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