Welcome to Cold War 2.0

Last week I wrote that the only important questions right now revolve around who is China’s President Xi Jinping and how is he going to respond to the prospect of western liberal democracies seeking to decouple from the Middle Kingdom as we enter into a new ideological cold war between capitalism and “socialism with Chinese characteristics”.

If there was any doubt about the gravity of this situation, which could absolutely lead to a full-blown kinetic conflict between the world’s two major superpowers over Taiwan (or via miscalculations in the South China Sea), the White House released a detailed paper outlining changes to the “United States Strategic Approach to the People’s Republic of China”.

And you don’t need to go beyond the first few paragraphs to get a sense of the profound shift in the zeitgeist apropos China, which has coalesced with even greater intensity since the advent of COVID-19.

“Since the United States and the People’s Republic of China (PRC) established diplomatic relations in 1979, United States policy toward the PRC was largely premised on a hope that deepening engagement would spur fundamental economic and political opening in the PRC and lead to its emergence as a constructive and responsible global stakeholder, with a more open society,” the US government begins.

“More than 40 years later, it has become evident that this approach underestimated the will of the Chinese Communist Party (CCP) to constrain the scope of economic and political reform in China. Over the past two decades, reforms have slowed, stalled, or reversed.

“The PRC’s rapid economic development and increased engagement with the world did not lead to convergence with the citizen-centric, free and open order as the US had hoped. The CCP has chosen instead to exploit the free and open rules-based order and attempt to reshape the international system in its favour.

“Beijing openly acknowledges that it seeks to transform the international order to align with CCP interests and ideology. The CCP’s expanding use of economic, political, and military power to compel acquiescence from nation states harms vital American interests and undermines the sovereignty and dignity of countries and individuals around the world.”

The importance of this statement is that it is not simply a hawkish Pentagon refrain. It is rather a whole-of-government consensus that was signed off by all relevant US agencies, and which increasingly reflects the position of other leading Western states. Welcome to Cold War 2.0.