Are we on the brink of a new Cold War? The question isn't as outlandish as it seemed only a few years ago. The United States is still the sole reigning superpower, but it is being challenged by the rising power of China, just as ancient Rome was challenged by Carthage, and Britain was challenged by Germany in the years before World War I. Should we therefore think of the United States and China as we once did about the United States and the Soviet Union, two gladiators doomed to an increasingly globalized combat until one side fades?
Or are we entering a new period of diversified global economic cooperation in which the very idea of old-fashioned imperial power politics has become obsolete? Should we see the United States and China as more like France and Germany after World War II, adversaries wise enough to draw together in an increasingly close circle of cooperation that subsumes neighbors and substitutes economic exchange for geopolitical confrontation?
This is the central global question of our as-yet-unnamed historical moment. What will happen now that America's post-Cold War engagements in Iraq and Afghanistan have run their courses and U.S. attention has pivoted to Asia? Can the United States continue to engage China while somehow hedging against the strategic threat it poses? Can China go on seeing the United States as both an object of emulation and a barrier to its rightful place on the world stage?
The answer to these questions is a paradox: the paradox of Cool War.
The term Cool War aims to capture two different, contradictory historical developments that are taking place simultaneously: A classic struggle for power between two countries is unfolding at the same time that economic cooperation between them is becoming deeper and more fundamental.
The current situation differs from global power struggles of the past. The world's major power and its leading challenger are economically interdependent to an unprecedented degree. China needs the United States to continue buying its products. The United States needs China to continue lending it money. Their economic fates are, for the foreseeable future, tied together. At the same time, China's consistent military growth and increasingly aggressive stance in the seas that surround it portend regional struggle. The United States has officially "pivoted" to Asia, which means that it has acknowledged the strategic reality that China is the only country on Earth with the capacity and will to strip it of its current superpower status. In the first decade of the 21st century, the major international question was the relation between Islam and democracy. In this second decade of this still-young century, the great issues of conflict and cooperation have shifted. Now U.S. leadership and Western democracy are juxtaposed with China's global aspirations and its protean, emergent governing system. The effects of terrorism can still be felt, as they were recently in Boston, and America's political and media elite often still acts as if the Middle East is the only region that matters for U.S. national security. But for more farsighted observers and policymakers, attention is already shifting east.
The stakes of the debate over whether to contain China or engage it could not possibly be higher. One side argues that the United States must either accept decline or prepare for war. Only by military strength can the United States convince China that it is not worth challenging America's status as the sole superpower. Projecting weakness would lead to instability and make war all the more likely. The other side counters that trying to contain China is the worst thing the United States can do. Excessive defense spending will make the United States less competitive economically. Worse, it will encourage China to become aggressive itself, leading to an arms race that neither side wants and that would itself increase the chance of violence. Much better, they argue, to engage China politically and economically and encourage it to share the burdens of superpower status.
What we need is to change the way we think and talk about the U.S.-China relationship -- to develop an alternative to simple images of inevitable conflict or utopian cooperation. We need a way to understand the new structure that draws on historical precedent while recognizing why things are different this time. We need to understand where the United States and China can see eye to eye and where they cannot compromise. Most of all, we need a way forward to help avoid the real dangers that lie ahead.
We also need a more sophisticated understanding of the Chinese Communist Party. No longer ideologically communist, the leadership is pragmatic and committed to preserving its position of power. It seeks to maintain legitimacy through continued growth, regular transitions, and a tentative form of public accountability. It aims to manage deep internal divisions between entitled princelings and self-made meritocrats via a hybrid system that makes room for both types of elites.
The emerging Cool War will have profound significance for countries around the world, for institutions that exist to keep the peace through international cooperation, for multinational corporations that operate everywhere, and for the future of human rights. Ultimately, like the Cold War before it, this new kind of international engagement will involve every country on Earth.
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A powerful argument can be made that despite its economic rise, China will not try to challenge the position of the United States as the preeminent global leader because of the profound economic interdependence between the two countries. This is the essence of the official, though dated, Chinese slogan of "peaceful rise." Trade accounts for half of China's GDP, with exports significantly outstripping imports. The United States alone accounts for roughly 25 percent of Chinese sales. Total trade between the countries amounts to a stunning $500 billion a year. The Chinese government holds some $1.2 trillion in U.S. Treasury debt, or 8 percent of the outstanding total. Only the U.S. Federal Reserve and the Social Security trust fund hold more; all American households combined hold less.
As of the most recent count, 194,000 Chinese students attend U.S. universities; some 70,000 Americans live and study and work in mainland China. We are no longer in the realm of ping-pong diplomacy: We are in the world of economic and cultural partnership. These many cooperative projects require trust, credibility, and commitment -- all of which were lacking between the United States and the Soviet Union.
In the long run, China would like to rely less on exports and expand its customer base to include a bigger domestic market. The United States, for its part, would clearly prefer a more dispersed ownership of its debt. But for now, each side is stuck. For the foreseeable future, the U.S.-China economic relationship is going to remain a tight mutual embrace.
The argument that the United States and China will not find themselves in a struggle for global power depends on one historical fact: Never before has the dominant world power been so economically interdependent with the rising challenger it must confront. Under these conditions, trade and debt provide overwhelming economic incentives to avoid conflict that would be costly to all. Over time, the two countries' mutual interests will outweigh any tensions that arise between them.
Appealing as this liberal internationalist argument may be, seen through the lens of realism, China's economic rise, accompanied by America's relative economic decline, changes the global balance of power. It gives China the means, opportunity, and motive to alter the global arrangement in which the United States is the world's sole superpower. According to the logic of realism, the two countries are therefore already at odds in a struggle for geopolitical dominance. Under the circumstances, a shooting war is not unavoidable -- but conflict is.
Of all the potential direct flash points for real violent conflict between the United States and China, Taiwan is the scariest. In 2012, Tsai Ing-wen's Democratic Progressive Party won 47 percent of the vote on a platform of active independence. This was a sign that younger Taiwanese want to solidify the de facto independence they have enjoyed for most of their lives. The best Chinese offer is one state, two systems -- along the lines of Hong Kong -- and most Taiwanese tell pollsters they consider that unacceptable. If Tsai or another like-minded politician were to be elected in the future and Beijing wanted to shore up its legitimacy by distracting the public from a lagging economy, a hawkish Chinese leadership with close ties to the People's Liberation Army could send an as-yet-unbuilt aircraft carrier into the Taiwan Strait. The U.S. president would then face an immediate and pressing dilemma: to respond in kind, inviting war, or to hold back and compromise America's global superpower status in an instant. The Cuban missile crisis looked a lot like this.
But to alter the balance of power in a fundamental way, China does not need to reach military parity with the United States -- and once again, Taiwan is the demonstration case. From Beijing's standpoint, the optimal strategy toward Taiwan is to build up China's military capacity and acquire the island without a fight. The idea is that the United States might be prepared to tolerate the abandonment of its historical ally out of necessity, the way Britain ceded control over Hong Kong when it had no choice.
To see why this scenario is so plausible, all that is required is to ask the following question: Would the president of the United States go to war with China over Taiwan absent some high-profile immediate crisis capable of mobilizing domestic support? If the United States were to abandon Taipei, it would have to insist to China, as well as Japan, South Korea, and U.S. citizens, that Taiwan was in a basic sense different from the rest of Asia -- that the United States would protect Asian allies from hegemony despite letting Taiwan go.
Failure to do so credibly would transform capitulation on Taiwan into the end of U.S. military hegemony in Asia. It would represent a reversal of the victories in the Pacific during World War II. It would put much of the world's economic power within China's sphere of control, not only its sphere of influence. To be the regional hegemon in Asia would mean dominating more than half the world's population and more than half its economy. Even without increasing its position in Europe, the Middle East, Africa, or Latin America -- and without achieving military parity -- China could nonetheless be on a par with the United States in terms of global influence.
That moment of imagination may already have arrived: Although U.S. defense experts might think otherwise, many close watchers of U.S. domestic policy can conceive of a compromise on Taiwan that would restore Chinese sovereignty over the island. The future is now. For the United States to concede Asia to China's domination would entail stepping down from being the world's sole superpower to being one of two competing superpowers. But notice what this means. The only way the United States can credibly commit itself to the protection of its Asian allies is for the United States to remain committed to sole superpower status. China, for its part, need only grow its military capacity to the point where it would be big enough not to have to use it.
Military rise takes place over decades, not months. Too fast a buildup of Chinese capabilities would spook Washington and encourage hawks. Complete secrecy with regard to such a major buildup would be impossible, especially in an age of self-appointed blogger-spies. The Chinese Communist Party has done a good job of convincing China's public that the country's rise must proceed slowly, with economic growth first. It helps that the party is not subjected to the electoral cycles of democratic governments, with the limited time horizon that such a structure imposes.
Nevertheless, as most Chinese seem to realize, Beijing's long-term geopolitical interest lies in removing the United States from the position of sole global superpower. The reasons are both psychological and material. Like the United States, China is a continental power with vast reach. It has a glorious imperial history, including regional dominance of what was, for China, much of the known world. In the same way that the United States is proud of democracy and its global spread, China has its own rich civilizational ideal, Confucianism. During the years of China's ascendance, the cultures of Taiwan, Japan, Korea, and Vietnam -- sometimes called the Sinosphere -- were deeply influenced by Chinese ideas. And Confucianism still plays a meaningful part in the thinking of at least 1.7 billion people. The Chinese public is deeply nationalist, which matters to China's unelected political leadership as much as U.S. nationalism does to American politicians. As China becomes the world's largest economy, there is meaningful public pressure for its power status to advance in parallel. Any alternative would be humiliating. And as all Chinese know, the country has suffered its fair share of humiliation in the last two centuries.
This does not mean making Japan or South Korea into part of China. It does mean eventually replacing the existing regional security system that is designed to contain and balance it. The increasingly belligerent conflicts over small islands in the East China and South China seas are products of this emerging trend. In some cases, the islands are strategically important in and of themselves, but more often they represent the nationalist impulses of the competing states involved. Beijing's assertiveness signals that it thinks it should be deferred to because of its new status, while its neighbors' aggressive responses signal that they are unwilling for China to dominate without pushback.
Kuan Yew, the former Singaporean leader who has been a mentor to every major
Chinese leader since Deng Xiaoping, was recently asked whether China's leaders
intend to displace the United States as Asia's preeminent power. "Of
course," Lee replied. "Their reawakened sense of destiny is
an overpowering force." Indeed, Lee explained bluntly,
"It is China's intention to be the greatest power in the world."
There is plenty of hard evidence to support this interpretation. China's defense budget has grown more than 10 percent annually for several years, rising officially to $116 billion in the most recent published reports, with actual defense spending likely as high as $180 billion. In just the past couple of years, China commissioned its first aircraft carrier (a refitted Soviet model), announced plans to build several more, and openly tested several stealth aircraft and drones. In 2012, Communist Party-controlled media acknowledged more ambitious plans to develop ballistic missiles that would carry multiple warheads -- and therefore be able to get around the U.S. missile defense shield. China is also working on submarine-launched missiles that would avoid U.S. early-warning systems left over from the Cold War. And it's building up its space program on both the civilian and military sides.
Cyberwar, a fast-developing new front in global conflict, is another facet of China's effort to change its power relationship with the United States. Cyberattacks are not what makes the Cool War "cool," as some writers on ForeignPolicy.com have suggested. As a strategic matter, they do not differ fundamentally from older tools of espionage and sabotage. But cyberattacks are just now an especially fruitful method from the Chinese perspective because they do not (yet) involve traditional military mobilization and they exploit a dimension in which U.S. and Chinese power are more symmetrical. Cyberattacks involve a certain amount of deniability, as efforts can be made to mask the origin of attacks, making attribution difficult. They may have a significant economic upside, especially if they involve theft of intellectual property from U.S. firms. Moreover, cyberwar takes place largely in secret, unknown to the general public on both sides. Best of all for China, the rules for cyberwar are still very much in flux. Regular cyberattacks are therefore likely to be an ongoing facet of a Cool War, even if they are not definitional.
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Faced with the reality of conflict falling short of war, both sides need to cultivate allies as a component of their struggle. The Cold War's major strategic developments, from Soviet expansion to containment, from détente to Richard Nixon's opening to China, all clustered around the question of who would be aligned with whom. The Cool War, too, will involve a struggle to gain and keep allies. The meaning of alliance, however, will differ from what it meant during earlier wars, in which trade between the different camps was severely constricted. In the Cool War, the primary antagonists are each other's largest trading partners. Each side can try to offer security and economic partnership, but cannot easily demand an exclusive relationship with potential client states of the kind that obtained in the Cold War. Instead the goal will be to deepen connections over time so that the targeted ally comes to see its interests as more closely aligned with one side rather than the other. Much more than during the Cold War, key players may try to have it both ways. This is why many countries attempt to negotiating free trade with one or both sides, while keeping security ties with the other.
The Pacific region is the first and most obvious place where the game of alliances has begun to be played -- and it challenges the post-World War II "hub and spokes" arrangement of bilateral treaties between the United States and Japan, South Korea, Taiwan, and Australia that guaranteed security without joining them into a single regional alliance on the model of NATO.
Over the course of the last decade, China has replaced the United States as the largest trading partner with each of these Pacific countries. Consider this: In some fashion, the United States is now engaged in guaranteeing these countries' freedom to trade with China.
In November 2012, China joined Japan, South Korea, India, Australia, New Zealand, and the 10 members of the Association of Southeast Asian Nations to announce negotiations for what the group calls a Regional Comprehensive Economic Partnership. Taken as a whole, the proposed free trade group would include a population of some 3 billion people with as much as $20 trillion in GDP and approximately 40 percent of the world's trade. It represents an alternative to the American-proposed Trans-Pacific Partnership, which would include the United States but not China. For the moment, neither is mutually exclusive, but the exclusions are significant.
China's long-term interest is to supplant and eventually replace the United States as the most important regional actor. It has benefited from U.S. security guarantees and now sees no reason why it should be hemmed in by American proxies. At the same time, it must be careful not to frighten Japan and South Korea so much that they cling to Washington's embrace. Creating a regional trade alliance that included traditional U.S. regional allies but not the United States would serve these complicated and slightly contradictory goals. It would provide countries like Japan and South Korea with the incentive to draw closer to China while framing that movement in terms of economic advantage rather than security.
Emblematic of the Cool War's contradictory new reality is that China is negotiating for free trade with Japan at precisely the moment when geopolitical tensions between them are at their highest point in decades. The conflict over the Diaoyu/Senkaku Islands went from civilian to military in a matter of months, as both sides scrambled jet fighters and mobilized navies. This conflict is itself logical: the product of uncertainty over the changing balance of power. Yet the economic partnership is strengthening simultaneously.
The U.S. response to the changing geostrategic situation has been to signal increasing willingness to empower its regional allies, particularly Japan. The incorporation of a Japanese admiral as the second in command at last summer's RIMPAC exercise, the world's largest joint naval drill, was a signal that the United States views with favor a potential Japanese shift away from pacifism and toward a more active regional security role. And though U.S. President Barack Obama recently extended its agreement with South Korea to avoid its military nuclearization, the option remains on the table.
But this regional response will not be enough. The United States will also have to broaden its base of allies using the tools of ideology. The strongest argument that can be made to countries that trade freely with China is that Chinese hegemony would threaten their democratic freedoms. Sen. John McCain's proposed league of democracies -- a kind of free-form alliance of ideologically similar states designed to leave out China and Russia -- is therefore likely to be revived eventually, though probably under another name.
India is the leading candidate for membership. The originator of the Non-Aligned Movement is not in the same position as it was during the Cold War. Today, nonalignment risks letting China rise to regionally dominant status. India's interest is to balance China in the realm of geopolitics while urging it to respect international law, especially the laws of intellectual property and trade. India must, of course, be careful not to push the Chinese too far. China could use border troubles with India to feed domestic nationalism. But India could potentially be increasingly open to joining a democratic league to help contain China. The natural ground for the alliance is democracy and human rights -- the features that the United States and India share but China lacks.
China's great advantage in the race to find allies is its pragmatism. Unlike the United States, which often struggles awkwardly with its autocratic allies, China typically makes no demands that its allies comply with international norms of human rights or other responsible behavior. China's natural allies are, as a result, often bad international actors, as the examples of Iran, North Korea, and Syria make clear. Meanwhile, Beijing has an independent interest in opposing any form of humanitarian intervention or regime change based on a human rights justification -- hence its opposition to any justifications by the U.N. Security Council for intervention in Syria.
So it is natural -- and so far, cost-effective -- for China to provide cover for such allies. Russia shares the same interests, and the once-chilly China-Russia relationship has been considerably warmed by overlapping interests in trying to limit Western regime change. Indeed, Russia may emerge as China's most important geostrategic ally -- a development signaled recently by Xi Jinping making Russia his first foreign trip after assuming the Chinese presidency. Nothing of the kind had happened since Nixon's opening to China created a 30-year rift between the former allies. If the United States reached out to China in the Cold War to weaken the Soviet Union, China may try to use Russia similarly in the Cool War. Certainly, Russia's Vladimir Putin seems like he would oblige.
China has also been highly effective in creating alliances with resource-rich African states. China became Africa's leading trading partner in 2010. China typically opts to work with existing governments -- whether they are autocratic does not matter -- to build infrastructure that is sorely lacking. The Chinese tout their own expertise in rapid development; they bring Chinese labor to do the job; and they promise to deliver the benefits of improved roads, rivers, and revenue streams for government.
China's pragmatic approach to Africa is free of any evangelical spirit and appeals to its interlocutors' naked self-interest -- and the Chinese make no bones about the fact that they are pursuing their own self-interest as well. They make little or no attempt to reform African governance or African ways of life. They may condescend, but they do not lecture. Unlike Western interactions with Africa, the Chinese encounter does not seem plagued by bad conscience. How much this will ultimately matter to Africans remains to be seen. Backlash has begun in some places, and there will no doubt be more. But a policy of pragmatic honesty may confer real advantages when dealing with countries and peoples who are accustomed to being met with self-serving lies. China aims to get the benefits of resource colonization without paying the international price of being hated as a colonizer -- and it has a reasonable chance of succeeding.
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Extensive cooperation in economics, intense competition in geopolitics: This new situation poses extraordinary risks. Yet economic interdependence also poses unique opportunities for the peaceful resolution of conflict. What's more, it creates common interests that mitigate the impulse to domination. Trade is the area where cooperation can have the greatest transformative effects -- and the greatest potential avenue for resolution of conflicts. Today, China is an active participant in the World Trade Organization (WTO) regime, which is the most effective expression of international law ever created. Countries obey the decisions of WTO tribunals out of straightforward self-interest: The cost of defection is outweighed by the benefits of staying in the international trade regime. This is not a route to world government, utopian or dystopian, but rather a model of self-interested rule of law in an important economic realm.
To manage the Cool War, we must always keep in mind the tremendous gains that both the United States and China have achieved and will continue to experience as a result of economic cooperation. Both sides should use the leverage of their mutually beneficial economic relationship to make fighting less attractive. The positive benefits of trade will not render geopolitical conflict obsolete. But focusing on them can help discourage a too rapid recourse to violence.
The world is going to change under conditions of Cool War, and efforts to keep the conflict from heating up must take account of these changes. New networks of international alliances are emerging. International organizations like the WTO will have more power than before and should be deployed judiciously and creatively. International economic law can increasingly be enforced as a result of participants' mutual self-interest. Global corporations will have to develop new national allegiances as part of a Cool War world, but they can also provide incentives to discourage violence and associated economic losses. Human rights, long treated as a rhetorical prop in the struggle between great powers, will still be used as a tool. But over time, respecting rights may come to be in China's interests, with major consequences for the enforcement of human rights everywhere.
What unifies these conclusions is a willingness to embrace persistent contradiction as a fact of our world. We must be prepared to acknowledge both diverging interests and also areas of profound overlap. We must be forthright about ideological distance, yet remain open to the possibility that it can gradually be bridged. We must pay attention to the role of enduring self-interest while also remembering that what we believe our interest to be can change what it actually is.
The United States and China really are opponents -- and they really do need each other to prosper. Accepting all this requires changing some of our assumptions about friends and enemies, allies and competitors. It means acknowledging that opposed forces and ideas do not always merge into a grand synthesis and that their struggle also need not issue in an epic battle to the finish.
It would be uplifting to conclude that peace is logical, that rational people on all sides will avert conflict by acting sensibly. But such a conclusion simply betrays the facts -- and possibilities -- of this tense relationship. Instead I offer a more modest claim: Geostrategic conflict is inevitable, but mutual economic interdependence can help manage that conflict and keep it from spiraling out of control.
We cannot project a winner in the Cool War. If violence can be avoided, human well-being improved, and human rights expanded, perhaps everybody could emerge as a winner. If, however, confrontation leads to violence, we will all lose.