“If names be not correct, language is not in accordance with the truth of things. If language be not in accordance with the truth of things, affairs cannot be carried on to success.” 

Confucius, The Analects, Book XIII

Labelling US-China relations a ‘New Cold War’ is an intellectually lazy, historically sloppy, and potentially dangerous trope. There is nothing particularly unusual about strategic rivalry between major powers. Competition is inherent in the dynamics of any system of sovereign states. The question to be asked in the case of US-China relations is not why they compete, but why many observers apparently find such competition so baffling as to reach unthinkingly for a historical analogy based on a situation that ended more than a quarter century ago – as if the mere addition of the adjective ‘new’ is sufficient to make sense of the current circumstances. The ‘New Cold War’ metaphor superficially seems appropriate. In reality, however, it downplays and distorts the complexity of the Sino-American relationship, thus narrowing the strategic imagination and artificially constraining policy choices.

The ‘New Cold War’ metaphor superficially seems appropriate. In reality, however, it downplays and distorts the complexity of the Sino-American relationship, thus narrowing the strategic imagination and artificially constraining policy choices.

The roots of US-China competition reside in a fact so obvious as to be almost invisible: China is a communist country. Not in its ideology, though. In 2001, the Chinese Communist Party (CCP) changed its constitution to allow private business owners – capitalists – to join the Party, ending any pretense of belief in class struggle. But the structure of China’s political system is still that of a Leninist state led by a vanguard party. The CCP’s claim to rule now rests upon the historical nationalist narrative of the ‘rejuvenation’ of the ‘China Dream’ and China’s redemption under the CCP’s leadership after a hundred years of humiliation by the West. 

The dream of rejuvenation has animated the Chinese polity since the late Qing Dynasty in the 19th century. It has led China through decades of civil war and political experimentation in search of the wealth and power that China enjoyed in the past, and the restoration of which Beijing sees as its just due. The CCP emerged victorious from this process in 1949. As such, it cannot be denied that the CCP, in its post-Mao iterations, has been the most successful of the political experiments that modern China has endured. 

In this respect, the vanguard party’s claim to a monopoly of power – once based on ‘scientific’ knowledge of history’s inevitable direction – now resonates with an older aspect of Chinese political culture in which stability, harmony and progress must rest on acceptance of hierarchy (with the CCP and China manifestly at the apex). As China grew richer and more powerful, this attitude, coupled with the essentially revanchist narrative of China’s rejuvenation, well-nigh guaranteed strategic competition with the US and, more generally, with a West that had taken its dominance for granted. 

Still, until recently, when the scales belatedly fell from Western eyes, this state of affairs was obscured by the belief that economic reform in China would lead inevitably to political reform. Nixon’s opening to China was driven by cold and hard-headed Realpolitik calculations; so was Mao’s response. This was healthy because they dealt with each other without illusions. Hence, from 1972 to circa 2008, when the global financial crisis broke out, despite periods of tension the overall emphasis of US-China relations was on engagement. However, after the end of the Cold War, hubris progressively infected Western strategic calculations with feel-good softheadedness. 

I do not think that anyone was quite so delusional as to believe that China would ever become a carbon-copy of any Western system. Nevertheless, the hope was that it could be a Hong Kong or a Taiwan or a Singapore writ-large – or at the very least a ‘responsible stakeholder’ in the Western system. Disillusionment has now turned the said engagement emphasis or logic on its head. Engagement will not cease, but the focus is now on strategic competition – all the more bitter because of disillusionment.

In a Leninist system, the purpose of reform is always and only to preserve the system. But the expectation that China could be a ‘responsible stakeholder’ was – for a time – not entirely unreasonable. Still, it is in the very fact that such a role could be envisaged that the ‘New Cold War’ analogy begins to break down. In principle, although not always in practice, the US and the Soviet Union led two separate systems. Except in the avoidance of mutually assured destruction, no one would have expected the Soviet Union to be a responsible stakeholder in the American system. And yet since the 1980s, and with increasing speed and depth after the Berlin Wall came down – and even more so after China joined the WTO at the end of 2001 – China and the US have both become crucial components of a single global system. They compete within that system not to replace it with another but to dominate it. And this distinguishes US-China competition from Cold War-era US-Soviet competition. 

Of course, the West does not have a monopoly on hubris. On China’s side, since the global financial crisis, the CCP seems to have begun to believe its own propaganda about Western decline, overestimated its own capabilities, and prematurely abandoned Deng Xiaoping’s sage policy of hiding one’s might and biding one’s time. Today, in US-China relations, deep mistrust coexists with interdependence of a type and depth never before seen between modern strategic rivals – and certainly not in the relationship between the US and the Soviet Union. Indeed, the depth of the interdependence deepens mistrust by exposing mutual vulnerabilities.

Today, in US-China relations, deep distrust coexists with interdependence of a type and depth never before seen between modern strategic rivals – and certainly not in the relationship between the US and the Soviet Union. Indeed, the depth of the interdependence deepens mistrust by exposing mutual vulnerabilities. 

The US and China are entangled in webs spun by supply chains of an intricacy, density and scope that never before existed in the world economy. These global webs could only have been spun by the forces unleashed by the end of the Cold War. Indeed, they are the main characteristic of the post-Cold War international system. In 1919, John Maynard Keynes famously wrote of an inhabitant of London lying in bed, sipping his morning tea, and being able to order by telephone “products of the whole earth.” The operative word here is ‘products,’ as the supply chains that exist today are many times removed from ‘products’ and have created a qualitatively different species of globalization.  

The US and China are entangled in webs spun by supply chains of an intricacy, density and scope that never before existed in the world economy. These global webs could only have been spun by the forces unleashed by the end of the Cold War.

Much as they may want to, it will not be easy for either the US or China to disentangle themselves from these new webs. Although selective decoupling in certain fields has already begun, it is highly improbable that Washington or Beijing will be able to ‘decouple’ systematically across all domains to create two entirely separate systems. All major economies are enmeshed in the same webs. This is a new structural condition of post-Cold War international relations that coexists with and complicates the competition that is also always a core feature of relations between sovereign states. No major power’s relationship with China is free of some degree of concern about one aspect or another of Chinese behaviour, but none can be neatly classified as purely adversarial either – not even that of the US. Ambivalence, then, is the most salient characteristic of all post-Cold War major power relationships. 

Although selective decoupling in certain fields has already begun, it is highly improbable that Washington or Beijing will be able to ‘decouple’ systematically across all domains to create two entirely separate systems.

To be sure, the nature of the Chinese state is the fundamental cause of many of the complaints about Chinese economic behavior and the mistrust that such behaviour evokes. In a Leninist state, no enterprise – in particular, no Chinese enterprise, whether state-owned or private – can operate without the leave and favour of the CCP. Business and the party cultivate reciprocal special relationships that result in a less-than-level economic playing field at home.

Abroad, the party’s always-privileged interests, which are primarily domestic – there being no value higher than the party’s power – often result in mercantilist, ambitious, assertive and, indeed, often counterproductive foreign policy behaviour driven by the sense of entitlement inherent in the historical narrative by which the CCP justifies its rule. This narrative is deeply infused with ethnonationalism. China’s Leninist system is more accurately described as ‘Han Nationalism with Socialist Characteristics’ than ‘Socialism with Chinese Characteristics.’ This invests Chinese foreign policy with a clumsiness and a cultural autism that have aroused resentment in a diverse array of countries.

As China grew richer and more powerful, the idea of the country as a ‘responsible stakeholder’ also reached its limits. Yet I do not think that China is a revisionist power. It is, more accurately, a revanchist power. Wanting its real or imagined rights restored and its status recognized are different matters from revisionism. China has no strong incentive to kick over the table and radically revise the existing system because China was itself the main beneficiary of US-led globalization. When Xi Jinping plays at being a Davos man and waxes lyrical about globalization he – no less than leaders in Europe, Japan, Australia, ASEAN or any other beneficiary of the system – is really expressing anxiety about what it may mean for his country’s future if that system frays, given that a more transactional US appears no longer prepared to bear any burden or pay any price to lead it. At the same time, Chinese behaviours that others were prepared to tolerate or overlook when the country was weak, poor and only a minor part of the system have come to be regarded, increasingly, as threatening.

China is not going to change its Leninist system in any fundamental way. A Leninist system can make tactical adjustments to preserve itself – and the CCP has proven itself more adroit and adaptable than the Communist Party of the Soviet Union ever was – but some of the Chinese behaviours that the US and other major economies now find objectionable are driven by core elements of the Chinese system. Even where adjustments have already been made, such as in the protection of intellectual property and foreign ownership of enterprises, implementation is always an issue in a Leninist state where the party’s interest overrides all other considerations. In a vast country like China, implementation is also bedevilled by structural divergence between the macro-interests of the centre in Beijing and the micro-interests of local party and administration officials. “The rivers are deep, the mountains are high, and the Emperor is far away” is a Chinese saying that points to a problem that has persisted since ancient times. 

It would be equally naïve to expect the US to become less transactional once Donald Trump leaves office. Distrust for international organizations, a preference for bilateralism or unilateralism, scepticism about free trade, and disregard for the interests of friends and allies, among other things, have always been present in US foreign policy. Trump represents these tendencies in American political culture and may well have accentuated them, but he did not invent them. Nothing Trump has done has been as disruptive for the established order as was the case with Nixon unilaterally unpegging the US dollar from gold – something that overnight, and with no consultation with friends or allies, destroyed the Bretton Woods system. Bref, Trump is not the only transactional president in American history. The Shining City Upon a Hill has always cast a dark shadow – a fact of which those of us who live in the lowlands are more aware than those who have always lived on the hill. 

Nothing Trump has done has been as disruptive for the established order as was the case with Nixon unilaterally unpegging the US dollar from gold – something that overnight, and with no consultation with friends or allies, destroyed the Bretton Woods system. Bref, Trump is not the only transactional president in American history.

The world has changed, America has changed, and there is no going back to the status quo ante, because that too has changed. A different president may make and implement policies in a more orderly way – and that would be all to the good – but I doubt that these will be entirely new policies or a strict reversion to old policies. After its Middle Eastern post-Cold War overextensions, the US is reverting to its traditional role as offshore balancer in that region – a role that it has played in the Indo-Pacific for decades. It will eventually play such a role in Europe as well, because Russia is not the Soviet Union and poses a fundamentally different and non-existential threat. It is not unreasonable, therefore, to expect Europe to do more in its own defence. An offshore balancer is always going to be regarded with some distrust, either evoking fears of entanglement or fears of abandonment. As US-China competition intensifies, so too will both these fears intensify.

After its Middle Eastern post-Cold War overextensions, the US is reverting to its traditional role as offshore balancer in that region – a role that it has played in the Indo-Pacific for decades. It will eventually play such a role in Europe as well, because Russia is not the Soviet Union and poses a fundamentally different and non-existential threat.

The world is therefore confronted with two hard realities: first, a more assertive – if not downright aggressive – China driven by an ethnonationalism and sense of history that infuses its policies with a deep sense of entitlement and superiority; and, second, a more transactional America that will define its interests more narrowly and whose reliability is therefore more than usually suspect. 

The world is therefore confronted with two hard realities: first, a more assertive – if not downright aggressive – China driven by an ethnonationalism and sense of history that infuses its policies with a deep sense of entitlement and superiority; and, second, a more transactional America that will define its interests more narrowly and whose reliability is therefore more than usually suspect.

What is the correct response outside of Washington or Beijing? In international relations theory, if confronted with a powerful country, one could balance or hedge if that country is mistrusted, or one could bandwagon if one trusts it enough to think that it would advance one’s interests, or if hedging or balancing seems impossible. But what to do if a country is simultaneously too powerful to be avoided and distrusted, and if one has interests in both that do not neatly align across each relationship? The answer is to hedge, balance and bandwagon simultaneously. Only particularly stubborn academic theorists of international relations would see these as mutually exclusive alternatives. After all, this is natural behaviour for countries that have for centuries lived in the midst of major-power competition, as with the countries of Southeast Asia. 

But what to do if a country is simultaneously too powerful to be avoided and distrusted, and if one has interests in both that do not neatly align across each relationship? The answer is to hedge, balance and bandwagon simultaneously.

Allow me to provide a few examples. Largely for domestic political reasons, Duterte’s Philippines distanced itself from the US and tilted toward China in the expectation – not entirely met – of economic benefits. But it enhanced its relationship with Japan, America’s principal East Asian ally, which has helped Manila develop its maritime capabilities. For its part, Malaysia under former Prime Minister Najib maintains a close – some may say bought and paid for – economic relationship with China. And yet the Seventh Fleet still exercised with the Malaysian Navy and flew missions over the South China Sea from Malaysian airbases. Aside from Japan, South Korea, Australia and New Zealand – all formal US allies – no country in East Asia has closer defence and security relationship with the US than formally non-aligned Singapore, which is also one of the largest investors in China. Despite American pressures, Singapore has not banned Huawei from competing for our new nation-wide 5G network, even if the two principal nation-wide service providers (the Singapore government being the major shareholder in both) have announced that they will use European technologies, while a third privately owned service provider has said that it will use Huawei for localized networks.

Insofar as the US goal is to restore its preeminence, it will fail. American dominance was unchallenged only for a historically short and exceptional period – that is, from 1989 to circa 2008. We are now in a more historically normal period of contested order, even if it cannot be accurately described as a ‘New Cold War.’ But if China’s goal is to restore the position it once occupied at the apex of an ancient hierarchy, it too will fail. The world has changed for both the US and China, and the past is equally past for both of them.   

The very complexity and ambivalence of US-China relations – indeed of all post-Cold War major power relationships – and the new type of world economy that evolved after the Cold War, together create opportunities for third countries to avoid structuring strategic alignments across the whole gamut of issues strictly on the basis of one dimension of their respective relationships with Washington or Beijing. This is what is meant when ASEAN says that it does not wish to take sides. It will sometimes tilt one way on one issue or in one domain, and the other way on some other issue or in another domain, or otherwise go with a third country as its interests dictate. There will be few, if any, sweet spots that please everybody, but choices are not all binary either. 

I once asked a senior Vietnamese official how a change of leadership would affect Hanoi’s relations with Beijing. He replied: “Every Vietnamese leader must be able to get along with China, and every Vietnamese leader must be able to stand up to China. If you think that this cannot be done at the same time, you don’t deserve to be leader.” In different ways and to different degrees, this is the general Southeast Asian attitude toward both the US and China, and indeed vis-à-vis all major powers. 

To deal with a future in which US-China strategic competition is a new structural reality of international relations, I expect that such Southeast Asian behaviour will over time become more generalized. The US and China are both too powerful to be ignored by anyone. Neither will – for different reasons – be particularly trusted by anyone, including friends and allies. Simultaneously hedging, balancing and bandwagoning is therefore very logical behaviour under these circumstances. And this behaviour promotes the natural multipolarity of an increasingly diverse world in which nationalism is the most powerful and enduring global force. 

We are only at the very beginning of a process that will take decades to unfold. But if war can be avoided – and I think that the prospect of nuclear mutually assured destruction will keep the peace between the US and China, as it did between the US and the Soviet Union – what I see evolving is a system characterized by asymmetric, dynamic multipolarity. Asymmetric because the US and China will remain in a league of their own, forming the central axis of international relations; dynamic because other countries will continually arrange and rearrange themselves around this central axis in constantly shifting and variegated patterns – as their interests in particular domains or on specific issues or as evolving circumstances of their regions and domestic politics dictate, but never hardening into rigid or static alignments. 

This is good news because multipolarity creates agency. It broadens the space for manoeuvre and widens the range of options for strategic positioning. A bipolar system affords significantly narrower possibilities, and a unipolar system almost no room for manoeuvre, even if one is friendly toward that ‘pole.’ Of course, whether countries or parties have the wit to recognize the opportunities, the agility to take advantage of them, and the courage to resist the pressures and false choices that both the US and China are certainly going to deploy against them are different matters. Intelligence, agility and courage will turn on a multitude of factors. 

This is good news because multipolarity creates agency. It broadens the space for manoeuvre and widens the range of options for strategic positioning.

Above all, though, analysts and observers should take Confucius’ advice, call things by their proper names, and not allow themselves to be misled by the false analogy of a ‘New Cold War.’ This imposes a binary and fatalistic cast of mind, blinding them to the strategic possibilities inherent in the more complex environment that now exists.