Current Affairs

Cold War between US and China

Written by Zahid Malik

Since the normalizing of diplomatic relations between US and China four decades ago, this is the first time that tensions between the two countries have reached to the gravest level, after US Government ordering China to close its Houston Consulate. What started as a trade war, is gradually turning out to be a tense cold war between US and China, the two super powers.

Apparently, it seems that the world is going back to the era of two blocks, when post World War II, the world was divided in the “East” & “West” blocks. This time, US is again maintaining its spot but Russia is replaced by China now. However, it will be premature to predict or assume, if situation will unfold in the same pattern or, will take a different course this time.

The acrimony between Trump Administration and Xi Jinping led China Government, initially started from trade, but eventually extended to diplomacy, technology, human rights and defense, among other areas. Ordering close down of Houston Consulate is not the last and strongest decision on diplomatic front but Trump Administration is further considering a ban on more than 90 million members of ruling Communist Party on travel to United States. If this happens, it would escalate the tension to another highest level and one could easily imagine retaliating similar sanctions from Chinese side.

Trade War

Yangshan Port, formally the Yangshan Deep-Water Port, is a deep water port for container ships in Hangzhou Bay south of Shanghai

The intents of President Trumps were quite clear from his presidential campaign days as since then he has always been accusing China of taking undue advantage from US-China trade relations and making them more favorable for them. Therefore, as soon as he sworn in, a series of austere tariffs were imposed on Chinese goods to balance off the situation and bring China to a negotiation point.

It didn’t exactly work out the way it was planned, and has in fact led China to announce similar economic reprisals against US. Despite that two years are passed, and a Phase-I agreement was also signed between the two Governments, but much of tariffs are still not eased which is fueling into cold war between US and China .  

In recent years, both countries have been recruiting allies to gain influence in trade and development in different regions. China’s “One Belt One Road” initiative, part of which is called CPEC in Pakistan, is an ambitious economic development and commercial project that aims on improving connectivity and cooperation among multiple countries in the continents of Asia, Africa, and Europe. This is being seen as geo-political implication of China’s rise as world second super power.

IS CHINESE DIGITAL CURRENCY A THREAT TO BITCOIN AND US DOLLAR

Technology War

It started with a ban on Huawei, China’s largest technology company, based on accusations that China is using this company to steal strategic information from other nations, especially US and its allies (UK, EU, Japan, Australia etc). Huawei was all set to take first mover advantage on 5G technology leaving behind major technology giants from US and EU countries. However, this ban effectively gave a big set back to Huawei losing contracts from all major markets.

Similarly, Huawei smartphones were almost in position to overtake Korean smartphone manufacturer SAMSUNG and become the second largest mobile phone producer in the world, but US ban on Google/Android put them in severe financial trouble as in the absence of Android, Huawei smartphones lost attraction and interest from billions of users. One of the senior official from Huawei is still in Canadian detention since end 2018. Though Huawei tried to retain its market by introducing its own operating system but it is still far from substituting Android and/or iOS.

Trump Administration is resolute to ensure that supply of microchips and other tech components to China is ceased to halt their progress. While such actions certainly impacted Chinese economy in short run but in long run these would also prove costly since China was single largest market for these products. On the other hand, China expressed their resolve to concentrate on building homegrown options and generate competitive options for the world in long run. If China is able to achieve their target and introduce a substitute technology to the world, it will be due to cold war between US and China in technology.

Diplomatic Conflicts

While closure of Houston Consulate is being considered as one of the step that would have lasting impact, actions and reprisals by one side or another, are continued in many other issues as well, some of which being described below:

1. Ban on Chinese Students

Recently, Trump administration imposed visa ban for Chinese graduate students and researchers who are presumed to be linked, through their universities, with Chinese Army.  China could possibly retaliate in the same manner, though immediate reaction has not come so far.

2. Hong Kong Conflict

US has been accusing China for human right violations in Hong Kong whereas China blames US for inciting unrest in the former British Colony. Following new security law, that US views as an attempt to suppress human rights activist, US Government passed a unanimous bill to penalize those Chinese and Hong Kong officials who would be part of such suppression. China considers it flagrant interference in their sovereignty. From the recent developments, it seems, China is willing to sacrifice “Asia’s financial trade center” position of Hong Kong and not capitulate to US and international community pressure.

3. Taiwan Conflict

Taiwan is another matter of conflict between the two countries. Chinese Government considers Taiwan as part of China so the recent arms deal between US and Taiwan has infuriated Chinese Government.      

4. South China Maritime Conflict

South China sea territorial dispute is another source of tension between US and China. This disputed sea area has enormous strategic importance. Over $3 trillion worth of world shipping, estimated to be one-third of total worldwide volume, passes through this route. Other than trade, this route has strategic defense importance since World War I. China claims that entire China Sea as part of their territory while Taiwan also makes similar claims. US has a strong role in these maritime conflicts as they need to secure this route for their trade and international movement. Furthermore, US also need to watch the interest of their allies in South East Asia so they call Chinese claim of “Nine-Dashed-Line” as illegal.  

Spartly islands in the South China Sea are currently the focal point of tension in the region, which US term as Indo-Pacific. These islands are claimed by five nations including China, Vietnam, Philippine, Malaysia and Taiwan. China not only claims these island but also holds the control and is undertaking massive military and infrastructure development, which has angered Washington. In this regard, US along with its allies such as France and UK have conducted Freedom of Navigation Operations (FONOP) in the region which could trigger the conflict to a dangerous point. China has been openly communicating US that South China Sea is an area of their “Core Interest”, thus their position on this issue is “non-negotiable”.   

This issue is going to remain one of the major reasons of conflict and cold war between US and China. ASEAN countries in general do not want to escalate this issue to an armed conflict, but involvement of other major world powers could, in fact provoke such conflicts to an uncontrolled military combat.

Not all is bad, this conflict has a positive aspect as well. Both sides are engaging very closely with countries in the region and negotiating long term development deals which would bring huge financial investments in the region. Both sides will try to earn new allies and make their diplomatic and strategic position stronger than ever.

5. China’s relationship with Tehran

Beijing has been nurturing bilateral relations with Tehran, a key enemy of Washington, to leverage their resentment about western powers. Despite a series of sanctions imposed by various US administrations over the decades, China continued to maintain trade and diplomatic ties with Iran. With huge oil reserves, Tehran could be a strategic supply source for Beijing in case a military tension between US and China is activated.

Recent agreement between Tehran and Beijing to conduct trade in RMB (Chinese Yuan) is another attempt to demean US international sanctions on trade with Iran which would not be welcomed by Washington. China’s plans to link Iran with CPEC route and use that land route for supply of oil in case sea routes are compromised. This is expected to meet serious resentment from US and pressure on linking states like Pakistan would rise.

Timeline: U.S. Relations With China 1949–2020

Conclusion

Some believe that policy being pursued by Trump Administration is based on emotions and injudicious strategic direction. However, the fissure created in recent times, is seen hard to overcome, regardless of Trump’s fate in the upcoming presidential elections.

The power gap is getting narrower but the ideological gap is getting wider. In coming years, countries would be forced to take sides, and in the consequence, could face unsought impacts on their economies, either positive or negative.

A new term for cold war between US and China is being used that is “soft war” not “cold war”, but only time will tell, which of the two, will be able to strengthen and sustain its economic, political and strategic influence on the rest of the world.

About the author

Zahid Malik

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