A Cold War is a conflict with no shots fired between the two principal opposing nations. Instead, it is a conflict over state ideological differences and power in the international system, fought through geopolitical maneuvering and restrictive economic policies with the threat of military action always looming. The conflict that coined the term Cold War was between the United States and the Soviet Union from 1947 to 1991. In the aftermath of the Second World War, the United States and the Soviet Union were the world’s strongest powers with opposing political ideologies. The two global hegemons used proxy wars and economic statecraft to promote their political influence and national interests. The United States and its liberal capitalist ideology were victorious as the Soviet Union collapsed and the Eastern Bloc gained independence.
After the fall of the Soviet Union in 1991, the United States' power had been unchallenged by any other nation in the international system until the early 2010s. China’s rapid economic growth has propelled it to a global leadership position, poised for a confrontation with the United States and an attempt to establish a new world order. The global distribution of power is shifting from a unipolar to a bipolar environment, with China beginning to balance the United States' power. China is a socialist market economy with a communist unitary party governmental system, with all of its government power concentrated in President Xi Jinping’s hands, while the United States is a capitalist free market economy and its system of government is an indirect democracy. This sets the stage for many potential conflicts, as historically the established global hegemon and the upcoming power almost always clash, especially with contrasting systems of government. This phenomenon is called the Thucydides Trap. Currently, the most poignant questions in international relations are whether the United States and China will fall into the Thucydides Trap and whether the United States and China are already in the midst of a Cold War? While there is no definitive answer to either of these questions, one can come to educated conclusions by analyzing the global political landscape. As of right now, most international relations scholars believe the United States and China are not in a Cold War; instead, one could more aptly describe the situation as a Trade War.
A Trade War is a way for adversaries to restrict each other’s economies by the imposition of tariffs, embargoes, or constraining policies. In 2018, the United States imposed $250 billion on China in tariffs, and the Chinese responded with tariffs of their own, costing both countries’ economies. The policy of economic constriction by the United States has continued since 2018 and recently has focused on ceasing American reliance on Chinese high-tech and protecting national security. The passage of the CHIPS Act, which subsidizes the construction of facilities to increase American-made microchips, is a direct signal of the United States transitioning away from Chinese high-tech products. Additionally, in March of 2024, the United States Congress passed a bill requiring TikTok to be sold to a non-Chinese country to be allowed to operate on American soil. Both nations are taking steps to hamper each other’s economic development and political influence, but they still maintain extensive economic relations and regularly engage in diplomacy. The United States and China relationship is certainly tumultuous, but are they on a crash course for conflict or a Cold War?
To answer this question, the modern history of the two nations and their foreign policy must be examined. In 1978, China adopted a new liberal economic strategy, focused on increasing worker productivity and education, foreign investment, and building a robust manufacturing sector. The vast growth in Chinese urban centers led to the transition from a majority agricultural economy to a high-value manufacturing-based economy. The government gave more autonomy to business owners, allowing them to set the prices of their goods, and established Special Economic Zones (SEZs), which are designated places for specific economic objectives, such as free-trade zones and industry clusters. The establishment of SEZs encouraged foreign investment and led to the emergence of Chinese innovation and a powerful technology sector. These new economic policies have proved extraordinarily effective, as the Chinese economy has grown by an average of 9% annually and foreign investment has grown by 60-fold since 1978. China currently has the second-largest economy in the world and has looked towards global avenues to expand.
One of the most impactful Chinese economic plans is called the Belt and Road Initiative (BRI). The BRI was initially launched in 2013 as a grand plan to construct physical infrastructure, linking Europe to China as a modern-day Silk Road and assisting developing nations with much-needed funding for critical infrastructure. It also consists of China funding SEZs in countries that signed onto the BRI. Currently, 143 countries have agreed to join the BRI in Asia, Africa, Oceania, and South America. China has spent $1 trillion and has issued $240 billion in loans to BRI member nations, which was supposed to fund over 13,000 infrastructure projects. However, it is estimated that 35% of these infrastructure projects have faced major issues and many contracts with nations receiving funding through the BRI have given China significant leverage over the nation’s future economic and political decisions. The BRI indicates a shift to a more aggressive foreign policy approach from Beijing, directly seeking to expand economic dependence on China and seize more political power on the global stage.
With this staggering economic development, China constructed the third strongest military in the world, a navy composed of the most vessels, and formulated an ambitious grand strategy. Xi Jinping has touted national rejuvenation and the Chinese Dream as the hallmarks of the future of Chinese domestic and foreign policy. This grand strategy focuses on furthering the strength of the Chinese military, uniting Taiwan with mainland China, and building a welfare system to accommodate all Chinese citizens. The theme of national rejuvenation is crucial, as it was deliberately chosen to unite China by evoking sentiments of Imperial China. Part of Xi’s plan has also included forging new intergovernmental organizations with China as their most powerful player. BRICS for example, an organization founded in 2009 by China, Russia, India, and Brazil seeks to further the economic and political ties of emerging countries and directly challenges the Western order that was established by the United States. China’s involvement in challenging the existing American and Eurocentric intergovernmental organizations does show that it is at least trying to balance the United States' power, if not usurp it.
The United States has the largest economy in the world, with the highest Gross Domestic Product (GDP) and foreign direct investment (FDI). The United States holds the most hard and soft power of any country, with the strongest economy and military. The United States’ political and economic strength ballooned in the aftermath of World War II, as it emerged more powerful than ever before and became a global hegemon. The United States was a key founder of both the North Atlantic Treaty Organization and the United Nations and is responsible for establishing much of the current international system. American foreign policy has continued to be similar since the Cold War with the Soviet Union, mostly practicing an interventionist, democracy-first policy. In 2002, the Bush Doctrine was published, which had two major effects on American foreign policy. The United States began taking more broad preventative military action to protect its national interests and it started defending democratic nations more strongly. An example is Taiwan, an island nation off the coast of mainland China that China deems to be a breakaway province. While the United States does not have any official diplomatic relations with Taiwan, their relationship is vital to the security interests of both the United States and Taiwan. The United States supplies the Taiwanese military with advanced equipment and most likely would rush to its defense if Taiwan was to be attacked.
The United States' response to rising Chinese power has been the deepening of ties between the United States and allies in Asia, specifically Japan and South Korea. The three nations had a summit at Camp David and vowed to increase cooperation and strengthen diplomatic, economic, and defense ties. The United States' interest lies in preventing China from achieving unchecked power in Asia and securing its economic superiority in the Pacific.
The key to maintaining, as President Joe Biden said, “competition, not conflict” and avoiding a Cold War between Beijing and Washington is continued economic partnership. The United States and China are deeply economically intertwined. Both the United States and China’s largest trading partners are each other. The United States relies heavily on Chinese imports which account for 16.5% of total United States imports and 32.4% of the United States trade deficit is with China. A conflict between the two superpowers would be economically catastrophic for both actors; therefore, to avoid a conflict the increase and continuation of economic interdependence would make it nearly impossible for economic decoupling and thus conflict.
President Biden and President Xi met in San Francisco where they held a summit to advance diplomatic ties and calm the tensions between the two countries. This summit proved incredibly fruitful for both nations, and future communication and agreements similar to this will prevent their relationship from spiraling into a Cold War. One important advancement from this summit was the restoration of military-to-military communication between the United States and Chinese militaries. Increasing communication will allow the two nations to build trust and hopefully reduce animosity. While recently, the United States and Chinese relations have looked hopeful, there is one aspect that could completely derail it: Taiwan. If China were to invade Taiwan, Chinese-American relations would suffer immensely and possibly set the course for an irreversibly devastating Cold War, or even worse. An invasion of Taiwan by China would directly contest the United States' economic and political interests, forcing the United States to intervene and protect Taiwan. This would bring the two powers directly facing off head to head.
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