America vs. Russia and China: Welcome to Cold War II

A serviceman carries a air-to-ground missile next to Sukhoi Su-25 jet fighters during a drill

The Second Cold War is a rematch among the same teams.

May-June 2018

China’s acceptance of rules for world trade drafted by the United States and its allies without Chinese participation. Another casualty of Cold War II is the idea of a global “rules-based trading system”—at least if the rules are drafted by the United States and its allies, in a process like the TPP negotiations from which China is excluded. The Obama administration’s claim that China could be forced to play by more liberal rules in order to participate in the multinational markets that the TPP and the TTIP would create was always absurd. For one thing, the TPP’s allegedly immense trading bloc would have consisted chiefly of the United States and Japan, already deeply linked with the Chinese economy, and a collection of smaller economies that already trade heavily with China as well. As for the transatlantic TTIP, America and Europe’s hunger for access to Chinese labor, consumers or, in some cases, capital makes a mockery of claims that China would be forced to adopt liberal capitalism in order to break into a new, deeper Euro-American market.

The notion that the United States, Europe and Japan, in the early twenty-first century and without Chinese participation, could “lock in” trade and investment rules that China would be forced to obey for decades or generations to come is a fantasy. Measured by purchasing power parity (PPP), China is already the world’s largest economy; at some point in the next decade or so, it is likely to surpass the United States by the other measure, market exchange rates. While its growth rate will slow as it transitions from a developing country to a middle-income nation, China will continue to grow more rapidly than the United States or its allies among developed nations in Europe and Asia.

By 2050, the consulting firm PwC estimates, in PPP terms the GDP of China will be $58.5 trillion—as compared to the United States’ $34.1 trillion and Japan’s mere $6.8 trillion. To be sure, per capita GDP in the United States and Japan probably will still be much higher, and so will the shares of their populations comprising middle-class consumers and workers. But only the most provocative and frightening behavior on the part of China can overcome the steady growth of its economic gravitational pull.

In 2015, when the China-dominated Asian Infrastructure Investment Bank was founded as a rival to the World Bank and Asian Development Bank, both deferential to the United States, the Obama administration pressured America’s allies not to take part. The “special relationship” notwithstanding, Britain led a stampede of European countries into partnership with the AIIB. As Singapore’s Kishore Mahbubani wrote at the time, in an essay entitled “Why Britain Joining China-Led Bank is a Sign of American Decline,”

“The U.S. can no longer dominate world history. A new power has also arrived. The British, like most other middle powers, have decided to hedge their bets and work with China as well as the U.S. But this is also a matter of survival. If London does not serve the financial and economic interests of a rising China, it could become sidelined in the 21st century. Hence, the British have no choice but to work with China.”

What is true for perfidious Albion is also true for most of America’s military allies. America’s European allies in particular cannot be expected to sacrifice their interests in commercial relationships with China, whose growing military power does not immediately threaten them as the presence of the Red Army in half of Europe did during Cold War I. China’s “New Silk Road” initiative seeks to integrate countries as far away as those of western Europe into a new pan-Eurasian economic system. The idea of a Euro-American economic alliance against China is doomed in advance, thanks to the economic self-interest of European nations, looking outside their shrinking or slowly growing economies for foreign markets and offshore labor.

Russia’s acquiescence in a permanent U.S./NATO military presence on its borders and the return of Crimea to Ukraine. On the other side of Eurasia, the United States may also be forced into humiliating retreat from objectives in Cold War II that it cannot realistically achieve.

As part of its bid for global hegemony following the fall of the Berlin Wall, the United States claimed that the very idea of spheres of influence was obsolete. In 2013 Obama’s secretary of state, John Kerry, announced, “The era of the Monroe Doctrine is over.”

Really? Is turnabout fair play? If the extension of the U.S.-led NATO alliance to the borders of Russia is legitimate, would new Russian bases in Cuba be acceptable as well? Would the United States really have no objection to a Sino-Mexican military alliance, complete with Chinese military installations on the U.S.-Mexican border and provocative freedom-of-navigation operations by Chinese warships in the Gulf of Mexico? All of America’s neighbors, including Mexico and Canada, have been invaded in the past by the United States, so China could claim that its North American alliances were purely defensive in nature.