With a new decade of competition looming, Washington is pushing back hard against Beijing across a range of fronts, including trade, military and diplomatic matters.
For some the tensions are reminiscent of the Cold War, the almost 50-year conflict between the Soviet Union and the US which defined much of the 20th century.
But this is not the Cold War — and the People’s Republic of China is not the USSR.
Three decades after the Soviet Union collapsed in 1991, China is now richer and more stable than its powerful communist predecessor ever was — giving it enormous global sway.
In fact, China’s economy is expected to overtake the US by most economic measures by 2030, according to Herve Lemahieu, director of the Sydney-based Lowy Institute Asian Power and Diplomacy Program.
A lot of this success is down to a reinterpretation of traditional ideology. Since the death of founder Mao Zedong in 1976, the ruling Communist Party has slowly moved to embrace aspects of capitalism, in an ideological construct known locally as “socialism with Chinese characteristics.”
Rather than ending up an anachronism of an outdated communist system, China’s planned economy has been used to dramatically bolster state-owned enterprises, now some of the largest companies in the world.
“The Soviet Union focused on their military and the economy was almost an afterthought. The Soviet economy was almost entirely focused on their military,” said Carl Schuster, a former director of operations with the US Pacific Command’s Joint Intelligence Center, who worked as a Soviet military expert for the US Navy during the Cold War.
China has tried to avoid falling into a trap of rapid, unsustainable military growth. While it has still steadily grown and modernized its military, the country has managed to keep its spending far below the exorbitant levels of the Soviet Union, at least publicly.
As a result, China is far more economically powerful in 2019 than the Soviet Union ever was. “During the Cold War in the 1980s, the Soviet Union had a smaller economy than Japan,” Lemahieu said.
That isn’t to say that Washington and Beijing don’t engage in military brinksmanship. It’s just far more localized to Asia.
Both sides have accused the other of provoking a military confrontation in the South China Sea through a rapid militarization of the region. When the US deployed a THAAD missile defense system in South Korea in 2017, relations between Seoul and Beijing went into a deep freeze.
While the threat of nuclear war also hung over the world during the Cold War, the situation with China is markedly different.
But there have been early signs that tensions over nuclear issues could grow again.
“If the US deploys missiles in this part of the world, at the doorstep of China, China will be forced to take countermeasures,” said Fu Cong, Director General of the Chinese Foreign Ministry’s Arms Control Department, on August 6.
During the Cold War, Moscow and Washington operated in separate trading spheres, competing against each other for trade from third parties.
In the modern global economy, however, relationships are far more intertwined. China is the largest trading partner for dozens of countries across the world, including major US allies like Australia, Japan and New Zealand.
“You might be an ally of the US in a security sense and consider China to be your most important trading partner. There are no clear blocs anymore, that’s not how this will work,” Lemahieu said.
Even at home, there are many more trade links between the US and China today than there were between Washington and Moscow. US President Donald Trump has long complained about the trade deficit with China, accusing Beijing of creating an unfair advantage for its own companies. In response, he kicked off a trade war in June 2018, placing tariffs on hundreds of billions of dollars in goods from China.
But with the US and China exposed to each others’ fiscal setbacks, further economic competition won’t be a simple win-or-lose proposition, as with the Soviet Union.
“During the Cold War we weren’t dealing with an interdependent global economy but essentially two major blocs that were more or less self-dependent in terms of their economic well-being,” Lemahieu said.
Any prolonged economic conflict could be a zero-sum game for both the US and China, Lemahieu said, dragging down both economies and causing repercussions across the world.
“You might be able to hit China to such an extent that by 2030 its economy is 8% smaller, but then the US would also take a hit. It could be about 3.3% smaller,” he said.
“I’d say the economics and the scale favors China rather than the US.”
US allies divided
While the US could argue the Soviet Union was a clear threat to world security, the case against Beijing is far less simple. In fact, some countries are finding China’s offers of financial support with no political interference an attractive option.
“China has played the card that the US tried to mold the world in their image, while (Beijing) are just wanting to trade. Your government and your country is your own sovereign question and we have no say,” Schuster said. “That’s very compelling.”
Comprising the US, Australia, Canada, the United Kingdom and New Zealand, the intelligence gathering network traces its origins to World War II and remains a powerful diplomatic bloc. However China is now the largest trading partner for two out of the five members — Australia and New Zealand — and a major part of the economy for the other three.
In his 2018 testimony, Mattis said relations between the US and its partners had grown more complicated since the Cold War, when there were two very distinct global spheres — one communist, one capitalist.
“(Now) everyone has some sort of connectivity. The US has an important role in Europe as a partner, China has an important role in Europe as a partner,” he told CNN. “Beijing is present in all these areas that the Soviet Union wasn’t.”
The US has certainly been ramping up the rhetoric of late. Washington this year lobbied hard to stop countries from using technology from Chinese giant Huawei to build 5G networks over alleged security concerns.
“We already have Huawei products in New Zealand and Huawei already operates in New Zealand,” she said.
Schuster, formerly of the US Pacific Command’s Joint Intelligence Center, said such public divisions among Washington’s close allies didn’t bode well for any ambition to build a united global front against China.
“If the US can’t convince the Five Eyes, the odds of successfully persuading any others not immediately and directly threatened by China will be quite small,” he added.
The new space race
When the first unmanned rover touched down on the far side of the moon in January 2019, neither Soviet nor US-made treads disturbed the lunar dust. They were Chinese.
Fifty years after the US beat the Soviet Union to the moon, the space race is on again. Only this time it’s the US and China aiming to be the next country to successfully land a person on the moon.
The new lunar race is symbolic of so much in the new state of relations between the two countries. China has caught up to the US quickly — when US astronauts landed on the moon in 1969, China’s space agency hadn’t even launched a satellite — and is now hoping to overtake it.
Former CIA analyst Mattis, who at the time was a visiting fellow at the Australian Strategic Policy Institute, told CNN that any mass move by the US government to confront China would require a marked shift from the status quo.
“Waging the Cold War required 10 years of government reform, massive policy debates and led to tens of thousands of US citizens dead in places all over the world — hundreds of thousands, or millions, dead in places like North Vietnam and spread out around the world,” he said.
And with memories of the true costs of the Cold War still burning, Mattis said it was understandable if US policymakers were reluctant to engage.
“The scope of it is huge,” he said. “But what sort of costs are we actually prepared to take?”