A Cold War in No One’s Interest

Today’s Cold War between the US and China is serving little, if any, purpose. Mainly, the goal seems to be to divert US voters’ attention away from the current administration’s mishandling of COVID-19. While, outwardly, the US has rationalized its actions as a response to China’s behavior towards Xinjiang and Hong Kong, within the US the human and economic costs of the virus are becoming painfully clear to many Americans. The human cost, reported daily, stands at 3.7 million cases and over 140.000 deaths, both far higher than any other country in the world. While numbers can leave one numb, it means hundreds of thousands of Americans have lost someone dear. In economic terms, the Federal government has already spent $2 trillion, a number likely to increase substantially to cover ongoing unemployment, financial aid for businesses, and support for state and local governments. While the Trump administration projected an optimistic V-shaped recovery in the third quarter, the Federal Reserve chair projected the economy would not return to normal before the end of 2021 at the earliest and the GDP is likely to be double-digit negative this year. Consumer confidence will likely continue to trend downwards as many states report severe outbreaks after opening too early and unemployment is expected to surpass 10 percent. It’s hard to believe anything, including a Cold War with China, can divert voters’ attention away from the hard truths on the ground. 

The US has thus far focused its new Cold War around the implementation of China’s national security legislation in Hong Kong, the ongoing interment of Uighurs in Xinjiang, the handling of the initial outbreak of COVID-19, the security threat posed by Huawei, and the security risk of Chinese students and scientists within the US. In response to these perceived threats, it has levied sanctions against selected Chinese leaders, banned Huawei 5G equipment and encouraged other countries to do so, passed legislation condemning Chinese behavior in Hong Kong and Xinjiang, urged developing countries against partnering with China through its Belt Road Initiative, prevented Huawei access to nanochips manufactured with US equipment and sent two aircraft carriers into the South China Sea. Trump has personally attempted to rebrand COVID-19 as ‘Kung-Flu’ in a further attempt to link the deadly virus to China.

While the material impact of these actions is largely inconsequential, they do negatively impact the international community’s perception of the US, which is already severely damaged by its inability to contain COVID-19’s impact on the US population and the domestic and international economy. The US’s requested withdrawal from the WHO has also been broadly condemned internationally. In contrast, China’s international reputation is faring quite well. After a slow start China’s response to the pandemic has been highly successful. China’s decision to extend its national security to Hong Kong, highly controversial in some countries, has the support of many others. Additionally, China’s Belt Road Initiative, after several hiccups early on regarding financial viability, is supported by many developing and developed countries, and China’s participation in multinational organizations is in sharp contrast to the US’s position. 

Another element of this new Cold War is the ongoing and well-publicized trade war. While advertised domestically as a win for the US, the trade war has instead resulted, as predicted by economists, in a lose-lose for both countries. The US just announced it is not pursuing Phase 2, which was intended as the core goal of having China stop subsidizing selected industries and companies. The US effort to decouple from Chinese technology led to China doubling down on its 2025 advanced technology initiative and its goal of manufacturing its own nanochips, where China trails the US. By cutting off the sale of chips to Huawei and other Chinese companies, the US reduces the risk of IP theft, but also eliminates a major revenue source for US-based chip manufacturers such as Qualcomm, leaving those companies with less cash to invest in their own research and development. 

The administration has also targeted Chinese students at US universities as well as Chinese scientists. Both groups have been identified as security risks and have been subject to immigration restrictions. Historically 40% of Chinese students, generally among the most talented graduates, have remained in the US. This number is likely to decline, depriving the US of critical talent. Predictably US corporations have pushed back against the immigration restrictions. 

A final consequence of both the trade war and the Cold War is domestic Sinophobia, which affects tens of millions of not just Chinese Americans. Fueled by the US media, anti-China sentiments in the US are at an all-time high, impacting the lives of Chinese and Asian American citizens, businesses, and communities. The issue of Sinophobia has, unfortunately, been largely ignored by the US public, media, and government, written off as a minor consequence of Trump’s slander while even longer standing racial tensions between Black and white Americans draw the focus of both international and domestic news.

So, if a Cold War with China does not support US self-interest, why is it happening? While diverting attention from the US COVID-19 response in an election year is an obvious answer, there are other important factors to consider as well. One is the lack of understanding by US officials as to what China’s priorities really are, though China has made little attempt to hide them. The Chinese priorities lie in domestic stability and prosperity for the Han Chinese people as well as protecting their sovereignty and borders, and reclaiming global respect.  While many of the actions China takes—including in Hong Kong and Xinjiang, its plans for Taiwan, and its Belt Road Initiative—are criticized as overreach and harmful, they are consistent with its goals. Rather than constructive engagement with China within the context of each country’s priorities, the US has opted for broadly based criticism. Unfortunately, the Cold War’s impact will likely not be limited to the two protagonists as countries in the Asia Pacific region will be pressured to align one way or the other. Fortunately, the vast majority of these countries will resist choosing sides and will deal with the US and China on a basis consistent with their own self-interest.

The upcoming US election will dramatically influence how this new Cold War plays out. The primary players on China issues in the Trump administration have established a clear pattern of criticism and attempted containment, a pattern unlikely to change if Trump is reelected. If Biden is elected the issues would be similar, but the likelihood of constructive engagement and win/win solutions would be far greater given Biden’s pragmatism, his choices in advisors, and his willingness to listen to those advisors. Just as US attempts to “contain” China have not been effective, time will demonstrate that a Cold War with China isn’t in either country’s best interest.

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