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USJI Voice Vol.42

What does the selling of the "New US-China Cold War" label mean?

June 25,2019
Keiji Nakatsuji
Professor, Ritsumeikan University

Almost every day in the media, we find phrases such as “the New US-China Cold War,” “the US-China Economic Cold War,” or even “the US-China High-Tech Cold War.” Not only journalists but also scholars of international relations use these phrases casually without giving the matter much consideration. Unfortunately, this usage indicates their appalling ignorance of the history of the US-Soviet Cold War and is even dangerously misleading.

The United States recognized the Soviet Union in 1933, partially because it wanted to rescue its economy, which was suffering terribly due to the Great Depression, through enhancing its trade relations with the Soviets. However, as the amount of trade between the two nations did not grow as expected, US-Soviet economic relations were negligible when the Cold War started.

Current US-China economic relations are entirely different. Needless to say, the US and China are one of the foremost important trading partners. They are now engaged in a situation that could be called a trade war, but even the Trump administration is not envisaging the application of a containment policy to China because doing so will certainly mean the US will ultimately punish itself. The containment policy during the Cold War time meant almost a total economic embargo of the Communist bloc at least until the late 1960s. It was not simply raising the percentage of tariffs as the current Trump administration is doing. Such a harsh measure was possible because US-Soviet economic relations were neither at a state of mutual interdependence nor were an indispensable part of the global supply chain. On the other hand, the US and China now economically rely on each other and both economies are deeply and closely integrated in the global supply chain. The blacklisting of Huawei is already affecting mobile phone sales and thus reducing the profits of phone retailers in Asia. Taiwan’s TSMC, a semi-conductor manufacturer, obviously has lost a huge customer in the form of Huawei. Reprisal tariffs by China are damaging Midwest farmers in the US, who were Trump supporters in 2016. If a US-China compromise is not reached in time, the Trump administration will raise tariffs up to 25% on most imports from China, which will surely be a huge blow to Apple to which China supplies not only many parts but also assembles iPhones on its behalf. For many US and non-US producers, it will take at least a few years while incurring huge costs to shift the structure of the global supply chain to avoid the damage which could be caused by high tariffs on Chinese imports. Worst of all, it is consumers who will ultimately pay the rising tariffs. The name of the game here is intricate and complex, and it is not a simple zero-sum game. Who we need is a leader or an organization that can calculate the profits and losses in an immensely complicated minus sum game. Trump is unfortunately the least equipped leader to toy with such an intricate game.

After all, unlike the Soviet Union during the Cold War, current China does not deny capitalism. Rather, it admits that China is a great beneficiary of the global market economy. The Cold War however was an existential conflict over conflicting ideologies and world visions. At least theoretically, Marxists believed the capitalism was the source of all evil and that communism should replace it. Therefore, Marxists could not allow the very existence of the opposing capitalists. The arguments of Trump and Xi do not contain such a “scientific fatalism,” but are rather more about immediate cash.

During the Cold War, however, the US intended to choke or at least soften Soviet attitudes through an economic embargo, but the effect of this policy was limited because there weren’t much trade relations between the West and the Soviet Union; therefore, the Cold War was fought more in the political sphere. The US built up its alliance network encircling communist nations to prevent their expansion so that the focus of the struggle was obviously political, while the current Sino-US crisis is economic in nature. Politically, for example, both the US and China are now hoping for the denuclearization of North Korea. Although the current Indo-Pacific strategy discussion in the United States reminds us of the Cold War strategy of containment, so far, the strategy does not however appear to be aiming at building a similar alliance network reminiscent of the time during the Cold War. In fact, many Asian nations hate to be compelled to choose between either the US or China. The above two facts themselves indicate there is nothing today like the two antagonistic blocks or camps that existed during the Cold War. I repeat, the name of the game today is not zero-sum like during the Cold War, but instead is much more complicated.

In essence, the Cold War was an existential as well as comprehensible crisis. Therefore, it was nothing like an economic cold war nor a high-tech cold war, because they are partial and not comprehensible. Frankly, the current usage of “the New US-China Cold War” label is almost completely interchangeable with a simpler word, “conflict.”

It is important that we learn useful wisdom from history. But, according to the late historian Ernest May, human beings quite often apply lessons from the immediate past to a present crisis without examining the appropriateness of those lessons from other eras. The people I have mentioned above are repeating such an error again simply because the Cold War was a crisis of the immediate past. The Cold War was such an existential crisis that it was destined to dangerously escalate. If we label the current crisis between the US and China with the name “New Cold War,” it could lead us to a self-fulfilling prophecy of an existential crisis. We should stop using such a simple metaphor before we cross the point of no return.


Aushor

Keiji Nakatsuji

Keiji Nakatsuji earned his Ph. D. at the University of Chicago in 1985. His dissertation title is, “The Straits in Crisis: America and the Long-term Disposition of Taiwan, 1950-1958.” In 1988, he became an Assistant Professor of Hiroshima University and a few years later an Associate Professor. He moved to Ritsumeikan University in 1998 and became a Professor in 1999. In the past, he was a visiting professor for University of Malaya and University of British Columbia. In 2006-7, he was a visiting scholar to Reischauer Institute at Harvard University. His works are mostly related to East Asian international relations and recently he published two books respectively about China’s entry to WTO and the regional integration in Asia-Pacific region. He was Dean of Graduate School of International Relations, Ritsumeikan University from April, 2014 to March, 2016 and he was as an Executive Committee Member of worldwide Association of Professional Schools of International Affairs (APSIA) until April, 2017. He is currently Specially Appointed Professor of Ritsumeikan University.


The USJI Voice is a policy-related opinion paper produced by researchers at USJI-affiliated universities. The USJI Voice is written for experts in areas connected to U.S.-Japan relations. Please share with us your opinions and suggestions related to your areas of interest.
The USJI does not take specific political positions. All views and conclusions expressed in the USJI Voice are those of the authors in their private capacity and do not represent or reflect the views of the USJI as a whole.

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