Is a Cold War 2.0 inevitable?
The message is clear — every state actor, big or small, will have to choose sides between two very different global offerings, each with their own set of norms, rules and ideologies.
This article is part of the series — Raisina Files 2021.
The global system[1] has never been as interconnected as was demonstrated by the COVID-19 outbreak. But global affairs are also at an inflection point. An unexpected manifestation of the pandemic is the bifurcation of the global order in a way unseen since the Cold War. It begs the question — is the world witnessing the beginning of a new bipolar era of global competition?
Global powers rise and fall. The pendulum swings back and forth, and a fragile equilibrium is achieved through the constant struggle for power and influence that keeps global affairs afloat. The rationale behind it lies in maximising the gains, forming powerful alliances and partnerships, and building enough capabilities to project power beyond the national realm. Any competitor strong enough to question the dominance of a global power will surely seize an opportunity to fill the gaps wherever they may present themselves. In the presence of a hegemon, there is always a process of polarisation that leads to the creation of a secondary system organised around a pole consisting of a single competitor or a group of rivals that seek to undermine the incumbent’s global power supremacy. To put things into perspective: a global reserve currency is not possible nowadays without the global power projection capabilities that enable the US to control the interconnected flows of goods, capital, services, and data, and to protect trade and transport routes from disruptions that might result in major supply shocks.
Any competitor strong enough to question the dominance of a global power will surely seize an opportunity to fill the gaps wherever they may present themselves.
Any competitor strong enough to question the dominance of a global power will surely seize an opportunity to fill the gaps wherever they may present themselves.
Global affairs are constantly influenced by competition and cooperation. The global system has recently entered a new transitional period with the formation of two centres of power — the US and China. The former has predominantly shaped international relations since the collapse of the Soviet Union at the end of the Cold War through global power projection via transnational networks established over decades of world dominance. On the other hand, given China’s impressive economic growth trajectories, even during the COVID-19 pandemic, there are heightened expectations around its continued rise to prominence in the global arena. However, it remains to be seen whether Beijing will be capable of transforming its growing geoeconomic clout and geopolitical influence into global power projection. Under any circumstance, the global system is already facing profound consequences, with long-lasting impacts for international affairs. Is a Cold War 2.0 inevitable amid the competition between the US and China?
From ‘Chimerica’ to systemic decoupling
According to US President Joe Biden’s new administration, China “is the only competitor potentially capable of combining its economic, diplomatic, military, and technological power to mount a sustained challenge to a stable and open international system.”[2] Furthermore, Secretary of State Antony Blinken portrayed China as “America’s most powerful adversary and competitor” as well as “America’s biggest geopolitical test of the 21st century.”[3] Chinese President Xi Jinping similarly identified the US as “the biggest source of chaos in the present-day world” as well as “the biggest threat to our country’s development and security.”[4] Moreover, the Chinese Communist Party “revealed late last year that the [Five Year] plan would span not just military but also economic, financial, and technological security.”[5]
The integration of China into US-led systems during the Cold War and afterwards led to the emergence of what many have termed as “Chimerica.”
The integration of China into US-led systems during the Cold War and afterwards led to the emergence of what many have termed as “Chimerica.”
A systemic rivalry means competition over the access to and control of global socioeconomic networks and structures. The integration of China into US-led systems during the Cold War and afterwards led to the emergence of what many have termed as “Chimerica.”[6] Globalisation created highly interconnected networks between Washington and Beijing, while also causing the consequent rise of China. This unintended outcome has led to China challenging US dominance in various spheres. This ongoing phenomenon has a ‘Cold War-like’ texture and may implicate the emergence of what has been termed as systemic decoupling — “the creation of two separate systems, that are often in competition with each other.”[7]
In the 1960s, British geographer Halford Mackinder claimed that China could become a major player in global affairs based on its geographic location, stretching from the “heartland” to “rimland terrains” of the world.[8] In keeping with Mackinder’s vision, China is seeking to establish a terrestrial connectivity through Eurasia[9] with the industrial heart of Europe — Germany, France, Italy, and Great Britain. Central and Eastern Europe are key to win “the heartland” as the control over these geographies will enable China’s global power projection. China’s Belt and Road Initiative (BRI)[10] can be viewed through the Mackinder prism. The BRI entails two terrestrial connectivity routes to Central and Eastern Europe — one through Russia, and the other through Central Asia and Turkey. Additionally, Beijing has also introduced various political and economic platforms for engagement and cooperation, with the ‘Cooperation between China and Central and Eastern European Countries’ (or the ‘17+1’) initiative the most prominent among them.[11]Based on Nicholas Spykman’s geopolitical premises,[12] China is also building up its sea power presence in the ‘rimland terrains’ of the South China Sea and the Indo-Pacific, and has developed a “string of pearls” approach in the Indian Ocean Region (IOR) to create a network of friendly ports and trade posts in India’s immediate neighbourhood as part of the maritime connectivity within the BRI.[13]
In reality, China is already pursuing the simultaneous formation of alternative routes via maritime and terrestrial connectivity, an approach combining Mackinder’s “heartland” and Spykman’s “rimland” strategies. China is seizing the opportunity to become the first Asian global power in modern international relations.
In reality, China is already pursuing the simultaneous formation of alternative routes via maritime and terrestrial connectivity, an approach combining Mackinder’s “heartland” and Spykman’s “rimland” strategies. China is seizing the opportunity to become the first Asian global power in modern international relations.
Political scientist Andrew Michta describes Beijing’s endgame as a “global inversion” of the interconnected trade flows, “which currently favour maritime routes, a setup that relies on U.S. naval power as enforcement. If China can develop a cross-Eurasian supply chain and protect it, it won’t need to match America in the maritime domain.”[14] In reality, China is already pursuing the simultaneous formation of alternative routes via maritime and terrestrial connectivity, an approach combining Mackinder’s “heartland” and Spykman’s “rimland” strategies. China is seizing the opportunity to become the first Asian global power in modern international relations. However, Beijing’s global rise will primarily be determined by the outcome of the Fourth Industrial Revolution and its capability to establish global networks of finance, trade, energy, economics and diplomacy.
Contrary to the bipolar global order established during the Cold War, the systemic rivalry between the US and China is evolving simultaneously at sea and on land. State actors seek to “weaponise interdependence” by leveraging global networks for strategic advantages.[15] There are four domains that will be crucial in determining the outcome of this mutual competition — political economy, technology, international rules and ideology, and partnerships and alliances.
Political economy
According to realpolitik thinking,[16] the distribution of power lies at the heart of international relations. Realpolitik has once again become the true motor of global affairs; it is the main driver of the systemic decoupling between the US and China following the shift of global power from the Atlantic to the Indo-Pacific. Competition between the two systemic rivals was already taking shape when former US President Barack Obama launched the American pivot to Asia and engaged with likeminded states to build institutional alliances, trade blocs and coalitions to counterbalance China’s increasing geoeconomic clout. His successor Donald Trump continued building up the pressure on Beijing on all fronts, mostly by applying a protectionist approach through bilateral agreements and coalitions.[17]
Beijing is just as keen to break up its dependence on American monetary, financial, economic, trade, diplomatic and technological networks.
Beijing is just as keen to break up its dependence on American monetary, financial, economic, trade, diplomatic and technological networks.
But Washington is not the only one pursuing the decoupling of ‘Chimerica’; Beijing is just as keen to break up its dependence on American monetary, financial, economic, trade, diplomatic and technological networks. China is focusing on “sustaining economic growth and prosperity, developing its domestic markets, boosting innovation and technology, improving its military capabilities and maintaining domestic stability.”[18] Its approach is clearly aimed at achieving greater self-sufficiency by establishing alternative systems and substituting critical connectedness that is “forcing China and the United States towards a zero-sum understanding” [19] due to the complex challenges and the bifurcation of the global affairs today.
Riding the Fourth Industrial Revolution wave
The nature of globalisation is determined by the geoeconomic and geopolitical expansion model by the nation-state that has established global dominance, much like Great Britain did in the nineteenth century and the US did at the end of the Cold War in the twentieth century. Both states achieved a dominant position in global affairs by riding the wave of previous industrial revolutions. Which country will emerge the winner from the ongoing digital revolution is yet to be seen, but the victor will surely impose its dominance on competitors and allies alike in the future. Attempts at establishing supremacy during the Fourth Industrial Revolution necessitates a drive towards self-sufficiency in critical technologies and global supply chains. Logically, there can only be one winner in such a contest; Xi has staked early claim and “has publicly proclaimed the imminence of China’s industrial superiority and strived to achieve it via the largest industrial espionage offensive in history.”[20]
Which country will emerge the winner from the ongoing digital revolution is yet to be seen, but the victor will surely impose its dominance on competitors and allies alike in the future.
Which country will emerge the winner from the ongoing digital revolution is yet to be seen, but the victor will surely impose its dominance on competitors and allies alike in the future.
At the same time, reconfiguring global supply chains away from China is becoming a reality as American capital withdrew from Beijing amidst COVID-19.[21] A global disruption of supply chains, alongside an imperilled rules-based global order and eroding international structures, has impacted all regions around the world. But the reconfiguration will be initiated mainly by the US to bring manufacturing and supply chains back home or to trusted partner countries. Moving production from traditional hubs to new ones will take time and effort but will also certainly create new geoeconomic advantages for certain actor such as India, projected to become the world’s third-largest economic power in the next decade.[22] Regional centres of trade, such as Japan and the European Union (EU), have already began considering a shift of manufacturing operations out of China. Over the long term, two parallel supply chains networks are likely to emerge — one centred around the US, the other facilitated by China.[23]
Sectors such as space technologies, artificial intelligence, defence and the cyber domain will witness strategic investments to promote the growth of new, regional power centres. This is important since any significant breakthrough in these areas will bestow global competitiveness and geoeconomic advantages. Further, the unprecedented interconnectedness of all socioeconomic systems has obfuscated any distinction between economic and trade indicators on one hand, and defence and security considerations on the other. This explains why the competition between the US and China does not solely represent a trade war but a broader rivalry extending to the global networks of finance, trade, economy, diplomacy, energy, defence and so forth.
Moving production from traditional hubs to new ones will take time and effort but will also certainly create new geoeconomic advantages for certain actor such as India, projected to become the world’s third-largest economic power in the next decade.
Moving production from traditional hubs to new ones will take time and effort but will also certainly create new geoeconomic advantages for certain actor such as India, projected to become the world’s third-largest economic power in the next decade.
Battle over global norms and ideologies
The Cold War encompassed a competition over the systemic hierarchy of international values, norms, and rules. After the Soviet Union’s collapse, the US was able to define this agenda by promoting the liberal ideas of a democratic political order coupled with a market economy, human rights, and freedoms. Similarly, the outcome of the ongoing competition between Washington and Beijing will also have an impact on the future of the global order in terms of norms, standards, rules, and values.[24] This will be implicated by a growing systemic coordination between China and Russia (the “Dragonbear”[25]) that indicates “a willingness to challenge the international order and the US position in it.”[26]
While there is no overt ideological competition yet, the US-led liberal international order is facing a threat from the growing influence of the Chinese Communist Party’s authoritarian ideology and governance model.[27] Following China’s global ascent, authoritarian regimes and ideas have established a stronghold in Southeast Asia, with “strongmen in power in Myanmar, Thailand and Cambodia, single parties in Laos and Vietnam, and democracy eroding in the Philippines, Malaysia, Indonesia.”[28] China has also drawn international attention for human rights abuses, “including a crackdown on pro-democracy activists in Hong Kong and against Uighurs in Xinjiang.”[29] And there is some speculation that Beijing might seek to penetrate the political spectrum and socioeconomic fabric of Taiwan to establish control over its processes and structures in the long run.[30]
Following China’s global ascent, authoritarian regimes and ideas have established a stronghold in Southeast Asia.
Following China’s global ascent, authoritarian regimes and ideas have established a stronghold in Southeast Asia.
At the same time, the demand for a COVID-19 vaccine scenario has presented a new dimension to the ongoing battle of international vaccines, and will pose a new challenge for the West as China sought to establish a “Health Silk Road” at the beginning of the pandemic to support partner countries with medical supplies.[31] Furthermore, Beijing aims to enhance its global image through its vaccine diplomacy.[32] In response, the US and three of its closest Indo-Pacific partners — India, Japan and Australia; together known as the Quadrilateral Security Dialogue (Quad)[33] — committed to boosting COVID-19 vaccine supply at their first summit and pledged to cooperate in the maritime, security, and cyber domain to meet the challenges posed by China.[34] Quad cooperation is aimed at boosting security and defence ties between the four Indo-Pacific countries, while counterbalancing China’s rise in this region.
The United Nations (UN) and other international organisations have already been impacted by the ongoing global power competition between the US and China. The diminished role of the UN Security Council (UNSC) is linked to Washington’s declining international role, particularly under the Trump administration.[35] It has been unable to keep the transatlantic community together and often faces difficulties in convincing allies to vote in favour of its draft resolutions (for instance, on Iran[36]). This is compounded by the rising assertiveness of China and Russia as diplomatic powers and their deft manoeuvring of multilateral institutions.
Quad cooperation is aimed at boosting security and defence ties between the four Indo-Pacific countries, while counterbalancing China’s rise in this region.
Quad cooperation is aimed at boosting security and defence ties between the four Indo-Pacific countries, while counterbalancing China’s rise in this region.
Multilateralism is at risk of becoming only a buzzword,[37] with institutions reduced to playgrounds for diplomatic battles between competing powers, much like the UNSC was during the Cold War. This dynamic could easily resurface, with the transatlantic community on one side, and China and Russia on the other. China and Russia operate within the existent global order with the clear goal of disrupting it, dismantling its multilateral structures, and creating better conditions for their conceptualisation of multilateralism, which is strictly opposed to Western values, norms and rules.[38] Coordinated efforts by the Dragonbear within the UNSC and other international organisations will likely increase further, as both states will seek to boost their international image as norm-setters in a rapidly changing rules-based global order.
Systemic bipolar era and alliances
The emergence of regional power centres has created the illusion of multipolarity, even as the systemic bipolarity between the US and China encompasses all relevant networks. An important structural layer of the global system consists of middle-sized powers oscillating between Washington and Beijing to maximise their own gains while avoiding picking a side for as long as possible — there are neither eternal allies, nor perpetual enemies, only eternal and perpetual interests.[39] This seems to be the leading geopolitical maxim of the upcoming Indo-Pacific decade. To counterbalance the growing Chinese presence in the IOR and its direct neighbourhood, India is expanding its network of regional and bilateral partnerships through various security and defence constellations, “while playing as well, carefully but with dedication, the card of the Indo-Pacific.”[40] Other key players like Canada, Great Britain, France, Germany, Italy, Australia, and Turkey have one thing in common, especially amid the COVID-19 pandemic — playing a balancing act between the US and China while delaying the difficult task of choosing a side. From a geopolitical point of view, the new great game will be predominantly situated in the South China Sea and the Indian Ocean due to rising competition between the two Asian giants, China and India, in addition to the systemic rivalry between China and the US.
The chasm between Washington and Beijing has not only led to the bipolarisation of the global order but has also increasingly put pressure on the regional powers caught in the middle.
The chasm between Washington and Beijing has not only led to the bipolarisation of the global order but has also increasingly put pressure on the regional powers caught in the middle.
The main hotspots and potential triggers for an escalation of the US-China rivalry are in the South and East China Seas, the Indian Ocean, the Mediterranean, the Caspian, and the Black Sea, as well as in the Middle East and North Africa. Tensions are also expected along the global chokepoints for energy and food as well as the Chinese Belt and Road connectivity. China has been in the lead at various multilateral forums, such as BRICS, the Asian Investment and Infrastructure Bank and the Shanghai Cooperation Organisation, and trade blocs such as the Regional Comprehensive Economic Partnership, which covers 15 countries in the Asia-Pacific region but excludes major economic powers like the US, EU and India.[41] The chasm between Washington and Beijing has not only led to the bipolarisation of the global order but has also increasingly put pressure on the regional powers caught in the middle.
What next
China has become the main external factor in American domestic politics, but the US can only exert a limited influence on Chinese domestic affairs. International cooperation has become a function of the competition and systemic rivalry between Washington and Beijing. But this competition need not necessarily turn into an overt and direct confrontation. Blinken stressed that the “relationship with China will be competitive when it should be, collaborative when it can be, and adversarial when it must be.”[42]During the first face-to-face high-level bilateral talks with the Biden administration, China’s top diplomat Yang Jiechi stressed that “US can no longer ‘speak to China from a position of strength.’”[43]
Eventually, the systemic competition between the US and China will fragment the interdependent and globalised world by unleashing centrifugal forces of bipolarity, affecting the entire global system deeply.
Eventually, the systemic competition between the US and China will fragment the interdependent and globalised world by unleashing centrifugal forces of bipolarity, affecting the entire global system deeply.
The competition between the US and China is made up as much by the technological, geoeconomic and institutional decoupling as it is by the oscillating alliances of middle power countries. China has already become a second pole of global power and has also begun challenging existing international structures and networks. While the US is seeking to preserve its institutional heritage, technological leverage and geoeconomic clout in cooperation with transatlantic allies and regional partners, China will clearly aim to establish and promote alternative structures and systems to counterbalance and challenge the American dominance. These competing strategies cannot result in a win-win situation. Eventually, the systemic competition between the US and China will fragment the interdependent and globalised world by unleashing centrifugal forces of bipolarity, affecting the entire global system deeply.
A pessimistic scenario will mean a more radical and consistent mutual decoupling, while an optimistic view reveals a more peaceful systemic coexistence, with Beijing focusing on partnerships and commitments to strengthen its domestic development until it builds a counterbalance to the overwhelming American influence.[44] In both scenarios, the message is clear — every state actor, big or small, will have to choose sides between two very different global offerings, each with their own set of norms, rules and ideologies. [45] The US has so far been the biggest source of China’s wealth.[46] And yet, Washington might also become the biggest source of China’s demise. The US will certainly not shy away from advancing this idea under aggravating circumstances of global power competition.
[1] Velina Tchakarova, “Global System Outlook 2020,” Antifragilista, 9 February 2020.
[2] Joe Biden, Interim National Security Strategic Guidance, Washington, The White House, March 2021, pp. 8.
[3] Dan De Luce and Abigail Williams, “China poses ‘biggest geopolitical test’ for the U.S., Secretary of State Blinken says,” NBCNEWS, 3 March 2021.
[4] Chris Buckley, “‘The East Is Rising’: Xi Maps Out China’s Post-Covid Ascent,” New York Times, 3 March 2021.
[5] George Magnus, “Economics, National Security, and the Competition with China,” War on the Rocks, 3 March 2021.
[6] Andrew Browne, “Bloomberg New Economy: The Chimera that Was ‘Chimerica’,” Bloomberg, 11 July 2020.
[7] Mark Leon Goldberg, “How COVID-19 is Accelerating Geopolitical Shifts,” UN Dispatch, 23 April 2020.
[8] Halford Mackinder, “Democratic ideals and reality,” Diane Publishing, no. 184, 1962.
[9] Mark Bassin, “Eurasia,” in European Regions and Boundaries: A Conceptual History, eds Diana Mishkova and Balázs Trencsényi (Oxford: Berghahn Books, 2019), pp. 210-32.
[10] World Bank, “Belt And Road Initiative,” 2018.
[11] Cooperation between China and Central and Eastern European Countries, 2013.
[12] Nicholas Spykman, The Geography of the Peace (New York, Harcourt: Brace and Company, 1944); America’s Strategy in World Politics: The United States and the Balance of Power, (New York, Harcourt: Brace and Company, 1942).
[13] Velina Tchakarova, “China and India: Geopolitics in the Indo-Pacific Decade, Part I,” The Defence Horizon Journal, Special Edition I/21, Geopolitics: 14-19.
[14] Andrew Michta, “Opinion | Can China Turn Europe Against America?” The Wall Street Journal, 2021.
[15] Henry Farrell and Abraham Newman, “Weaponized Interdependence: How Global Economic Networks Shape State Coercion,” International Security 44, no. 1 (Summer 2019): 42-79.
[16] John Bew, History of Realpolitik (Oxford University Press Inc, 2016).
[17] Guy Erb and Scott Sommers, “Still Losing Ground: The Consequences of the Trump Administration’s Bilateral Trade Policy,” Washington International Trade Association, 7 September 2020.
[18] Øystein Tunsjø, “The new US-China superpower rivalry,” East Asia Forum, 4 April 2020.
[19] Tunsjø, “The new US-China superpower rivalry”
[20] Edward Luttwak, “How to stop China’s long march,” UnHerd, 27 February 2021.
[21] Chloe Taylor, “Coronavirus is accelerating a ‘capital war’ between China and the US, investor warns,” CNBC News, 27 May 2021.
[22] “India to become 5th largest economy in 2025, 3rd largest by 2030,” The Economic Times, 26 December 2020.
[23] Velina Tchakarova, “Covid-19 and the Indo-Pacific Decade,” Observer Research Foundation, 8 July 2020.
[24] Sean Fleming, “World order is going to be rocked by AI – this is how,” The World Economic Forum, 13 February 2020.
[25] Velina Tchakarova, “The Dragonbear: An Axis of Convenience or a New Mode of Shaping the Global System?” Irmo Brief, March 2020.
[26] Michael Spirtas, “Are We Truly Prepared for a War with Russia or China?” The Rand Blog, 8 October 2018.
[27] “How China’s Communist Party trains foreign politicians,” The Economist, 10 December 2020.
[28] Bhavan Jaipragas, “Advantage China, as democracy slides from view in Southeast Asia,” South China Morning Post, 7 February 2021.
[29] Luce and Williams, “China poses ‘biggest geopolitical test’ for the U.S., Secretary of State Blinken says”
[30] Chia-Chien Chang and Alan H. Yang, “Weaponized Interdependence: China’s Economic Statecraft and Social Penetration against Taiwan,” Orbis 64, no. 2 (2020): 312-333.
[31] Wade Shepard, “China’s ‘Health Silk Road’ Gets A Boost From COVID-19,” Forbes, 27 March 2020.
[32] Emma Graham-Harrison and Tom Phillips, “China hopes ‘vaccine diplomacy’ will restore its image and boost its influence,” The Guardian, 29 November 2020.
[33] Ankit Panda, “The ‘Quad’ Summit: Delivering Value in the Indo-Pacific,” The Diplomat, 17 March 2021.
[34] “US, Indo-Pacific allies pledge to boost Covid-19 vaccine supply at Quad summit,” France 24, 13 March 2021.
[35] David Whineray, “The United States’ Current and Future Relationship With the United Nations,” Carnegie Endowment for International Peace, 6 March 2020.
[36] “Isolated by allies, US suffers UNSC defeat on Iran arms ban,” National Herald, 15 August 2020.
[37] Velina Tchakarova, “UNSC balancing between USA and the Dragonbear,” in Powering Universalism, ed. Ursula Werther-Pietsch, to be published in April 2021.
[38] Tchakarova, “The Dragonbear”
[39] Oxford Reference, “Lord Palmerston 1784–1865,” Oxford University Press.
[40] Jean-Luc Racine, “The New Indian Geopolitics of the Sea: From the Indian Ocean to the Indo-Pacific,” Hérodote 163 (4) (2016): 101-129.
[41] Iwamoto, Kentaro, “ ” Nikkei Asia, 2020.
[42] Luce and Williams, “China poses ‘biggest geopolitical test’ for the U.S., Secretary of State Blinken says.”
[43] Justin McCurry, “US and China publicly rebuke each other in first major talks of Biden era,” The Guardian, 19 March 2021.
[44] Øystein Tunsjø, “The new US-China superpower rivalry,” East Asia Forum, 4 April 2020.
[45] Michael Auslin, “The Coronacrisis Will Simply Exacerbate The Geo-Strategic Competition Between Beijing And Washington,” Hoover Institution, no. 64, 23 April 2020.
[46] Orville Schell, “The Ugly End of Chimerica,” Foreign Policy, 3 April 2020.
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