Guest post: Speedbox – The new cold war

Relations between two of the world’s superpowers have fallen to their lowest level in decades.

The United States has criticised China for the treatment of the Uyghurs; lobbied allies to ban various Chinese firm considered a security risk; imposed visa restrictions on Chinese officials as a consequence of the crackdown on Hong Kong democracy; and placed limits on work visas for Chinese journalists.

For their part, China has branded U.S. criticism of its Uyghur policy as “baseless” whilst telling Washington to mind their own business about Hong Kong. Beijing has cracked down on journalists from many nations (including Australia) and threatened to put American companies on a list of proscribed foreign entities. Separately, Australian goods have been banned or severely restricted into China and there is little doubt that the underlying reason is Australia’s relationship with the US.

The CCP thinks Washington is bent on containing China to prolong the declining power of the United States whilst denying China its rightful place in the global order. Washington increasingly believes the CCP is threatening US security interests, undermining its prosperity, interfering in its democracy, and challenging its values. One of the few things that unites a divided and partisan America is anti-China sentiment.

Previously, the US-China relationship was overseen by the need to work together on a range of global economic, financial, and geopolitical issues that mandated cooperation. But as China has replaced Russia as the main threat, these co-operative inclinations have almost entirely disappeared and are now complicated by recriminations over the coronavirus pandemic.

Former President Barack Obama habitually underplayed the power of the United States and seemed to accept the myth that China’s ascendancy was pre-ordained. Conversely, President Donald Trump seized the psychological high ground by dominating the media and forcing China onto the defensive. Trump demonstrated that no other country could match the economic, financial, and military power of the US. President Joe Biden was initially aimless – vacillating between his predecessors although he now seems to have grasped the enormity of the situation and the potential threat.

The mounting US-China differences over trade and technology are primarily responsible for the spike in hostilities and while important in themselves, those differences are characteristic of a deeper geo-political divide that lights the cold war fuse.

First, US-China rivalry is between the world’s two most powerful states, one a liberal democracy and the other communist. Second, it is a system-wide contest for supremacy. Third, it is about values as well as power. Fourth, from China’s perspective, they are committed to a multi-decade struggle for global ascendancy. Fifth, both sides would prefer any fight to occur by proxy but neither will step back from a direct confrontation if necessary.

There is, of course, a marked difference between the emerging cold war and the former strategic competition between the US and the USSR. At its best, the GDP of the Soviet Union was only 40 percent of that of the United States’ with little trade between the protagonists. But China’s GDP is already about 65 percent of the US and in stark contrast to the USSR, any geo-strategic contest with China includes trade, investment and technology.

The geographic centre of the new cold war is the Indo-Pacific and as the US and China are both Pacific powers, their rivalry will be felt most intensely in the region where their interests collide and there are several potential triggers for military confrontation such as Taiwan, South (and East) China Sea and Hong Kong.

Multiple Asia-Pacific nations have competing claims on areas within the South and East China Seas, including Japan whose historical enmity towards China is well documented.
Will the cold war become a hot war? The historical record suggests that although a hot war is not inevitable, it is a possibility. Tensions between rising and incumbent powers often precede military conflict or an extended period of confrontation and instability. And if the shooting starts, will it be a limited engagement or something much more destructive?

For the time being we will watch the festering rivalry between the United States and China punctuated by proxy conflicts, especially in cyberspace. Nations in the Asia Pacific will continue to suffer collateral damage and in that sense Australia is a minor victim in a much larger stoush.

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41 Responses to Guest post: Speedbox – The new cold war

  1. Entropy says:

    Is China still communist? True, the collective State demands subservience of the individual, but the State ate is no longer the owner of the means of production in many, many cases.

    I suspect China is now more like its half brother, Fascism. The state might not always own the means of production, but it still controls it. And of course, is not interested in political freedom. Fascism with a Confuciusian overlay to help control the serfs.

  2. Bruce of Newcastle says:

    It’s difficult to tell but there may be a lot of subsurface rumbling in China.

    Numerous disasters have afflicted the country in the last two years. The swine flu disaster had a major impact on the cost of living, and bad harvests also led to the CCP putting out news stories encouraging people to eat less, save leftovers and telling restaurants to reduce portion sizes. Always a bad sign when you hear that sort of thing from a communist government.

    Then in the recent massive floods vast areas of farmland were submerged, and three sizeable have dams burst in just the last few weeks. Plus the vaunted Three Gorges Dam appears to have been damaged from the earlier round of flooding.

    Then Covid hit in late 2019, with significant repressive controls instituted, although it’s hard to tell how repressive. And again in the last couple of weeks another wave based on Delta has been spreading. Add to that a July heatwave, which in apartment complexes would be stifling…so the people have been turning on their airconditioners.

    Which leads to the next problem – they’re running out of money because of the high coal and iron ore prices. Today:

    In response to the high energy usage across the country, coal prices exceeded 900 yuan (almost $140) a tonne in mid-July. This follows record prices for Asian coal in May, after an initially pessimistic outlook following the IEA report encouraging countries to move away from fossil fuels towards renewable alternatives.

    China has famously boycotted Australian coal exporters, but all that seems to be doing is putting more pressure on prices as they try to get supplies from elsewhere. I suspect more than a bit of rebadged Australian coal is finding its way to Chinese importers too.

    Chief Executive Paul Flynn of Australia’s Whitehaven Coal explained on the rise in demand, “We are also getting requests to bring cargos forward from our Japanese customers as well, that certainly indicated that the market is a little short and more coal is required.”

    The unlikely recovery of the energy source [ie. naughty CO2-producing coal], which much of Europe and other regions have already moved away from, is owing largely to growing Asian demand. In fact, since the beginning of 2021, the price of Australian coal has risen by 86 percent, sitting at over $150 a tonne towards the end of July, the highest the market has seen since September 2008. Likewise, South African coal has climbed 44 percent in 2021.

    Unrest in places like Mozambique and South Africa make finding extra coal tonnage harder too.

    All this adds up to President Xi in desperate need of distraction squirrels. So I expect we’ll see more and more sabre rattling from him.

  3. rickw says:

    It’s difficult to tell but there may be a lot of subsurface rumbling in China.

    Massive screw ups are a built in feature of Central Planning. (Look at the disaster of Australia’s central planning of a COVID response). Sooner or later the Central Planners make a mistake big enough to unite and unify the personnel against them.

    The CCP’s poorly designed and badly built flood control measures may be a big impetus. Thousands have been killed and there will most probably be food shortages.

  4. Chris M says:

    Hard to tell what is actually going on because we get mostly the smoke and mirrors media version. I think the US and China are very much closer now with the senile and degenerate Biden husk as figurehead, their softened approach actions show this. Words are nothing, the actions is where it’s at.

    “Is China still communist?”

    No it’s a Fascist state. The principle difference between the two is the allowance of private ownership (and thus liability) of business but under state direction. Australian govt is moving that way too.

  5. jupes says:

    First, US-China rivalry is between the world’s two most powerful states, one a liberal democracy and the other communist.

    The US is no longer a liberal democracy.

  6. lotocoti says:

    Some echoes from the past:
    In 1914, Germany didn’t recognise the potential power of its economic ascendancy,
    but rather, viewed its place on the world stage in Imperial terms.
    Likewise Japan in the thirties.
    Perhaps there are elements within the PRC who understand economic dominance is enough, others who believe China’s destiny lies in conquest, not commerce.

  7. Roger says:

    “Is China still communist? True, the collective State demands subservience of the individual, but the State ate is no longer the owner of the means of production in many, many cases.”

    There are parallels here with Lenin’s New Economic Policy of the early 1920s. Realising that the backward Russian economy could not sustain nationalisation, he reinstituted a mixed economy with private ownership as a pragmatic step on the path to pure Communism. China has done much the same on a grander scale for a couple of decades now. We know what followed in Russia in the 1930s. Do not be surprised if China takes a collectivist turn too. Xi is more Stalin than Lenin.

  8. Bar Beach Swimmer says:

    All good comments and a good post from Speedbox. Thank you.

    From BoN’s comment there is much suffering going on at the moment in China. With Biden in the WH it would seem that internal pressures are possibly a major plank in stymying increasing Chinese hegemony in the region.

  9. Roger says:

    Meanwhile, Germany has just dispatched a warship to the South China Sea, where it will conduct freedom of navigation operations after assisting with enforcing UN trade sanctions against North Korea.

  10. Old School Conservative says:

    Interesting to reflect on Hong Kong.
    Much of the MSM have pushed it into the forgettery. Travellers certainly aren’t going there. Many Australians with fond memories of HK are faced with more immediate problems and don’t think about it at all.
    Yet it still faces multiple issues with respect to China.
    Any cold war will impact significantly on HK.

  11. Eyrie says:

    OSC, HK is OVER.

  12. Speedbox says:

    Entropy says:
    August 5, 2021 at 7:56 am
    Is China still communist?

    Yes, good question. I actually paused for a very brief moment when I wrote that word. I did think about writing some clarification but the post was already fairly long and an analysis would have made the post much longer. For the time being, whilst the CCP use it, then I suppose I will too. I may write a post discussing the point at another time. Or you could write a guest post!

    🙂

  13. Speedbox says:

    Roger says:
    August 5, 2021 at 10:14 am
    Meanwhile, Germany has just dispatched a warship…..

    I have just finished writing a post on the Indo-Pacific that includes other nations…..not going to give too much away. 🙂 I will wait a few days before sending it to Adam to give others the opportunity to submit their own guest posts.

  14. Timothy Neilson says:

    President Joe Biden was initially aimless – vacillating between his predecessors although he now seems to have grasped the enormity of the situation and the potential threat.
    ****************
    Good post Speedbox. One minor clarification if I may.
    Biden is still aimless. He’s mentally incapable of anything else. He’s also not capable of grasping anything (except any little girl unfortunate enough to be in reach). Maybe someone in his administration has grasped the enormity of the situation, and I presume that’s what you meant.

  15. egg_ says:

    Great first post – food for thought.

    The US did enable China via trade and investment – there’s commentary that since the Nixon era the US courted China as a wedge against Russia in the old Cold War era.

  16. RobK says:

    Thanks Speedbox, a good read.
    Can anyone shed light on the underwriting of QE and bonds issued by the main player. It’s something I don’t have a complete handle on and would, I expect, have some bearing on the nature of the future developments regarding hostilities.

  17. RobK says:

    Thanks Speedbox, a good read.
    Can anyone shed light on the underwriting of QE and bonds issued by the main players?. It’s something I don’t have a complete handle on and would, I expect, have some bearing on the nature of the future developments regarding hostilities.

  18. RobK says:

    Players

  19. Old School Conservative says:

    You’re right Eyrie.

  20. Roger says:

    “The US did enable China via trade and investment – there’s commentary that since the Nixon era the US courted China as a wedge against Russia in the old Cold War era.”

    Correct, egg_.

    Of course the great Gough got in first, but then he was a Communist sympathiser.

    Kissinger & Nixon were just too clever by half and made the biggest political miscalculation of the post-war period, compounded by their successors granting China “most favoured nation” trading status in 1980.

  21. rickw says:

    OSC, HK is OVER.

    Talking to a friend there yesterday, making plans to escape. My only advice was not to go to Canada, Australia or New Zealand. Out of the frying pan and into the fire.

  22. Rorschach says:

    The US did enable China via trade and investment – there’s commentary that since the Nixon era the US courted China as a wedge against Russia in the old Cold War era.

    Trump courted Russia & Putin to help find a solution in the Middle East [already in the bugged the Flynn/Kislyak conversations]

    https://int.nyt.com/data/documenthelper/6976-flynn-kislyak-transcripts/cd9e96e708a9b0c8ba58/optimized/full.pdf

    It is not difficult to speculate that there would have been a pivot away from China to Russia at the same time. If the bogus Russia Gate, and Obama’s expulsion of diplomats etc didn’t happen, the end of ISIS would have been very fast and the Abraham Accords further advanced.

    It was in both countries interest to have China supressed for a bit. Both economically as well as militarily. [With China – both are essentially the same policy when dealing internationally].

    From my perspective – an major opportunity lost. But hey – Hollywood can sell more movies to China and Nike & co can keep their slave labour…

  23. Karabar says:

    Is Covid over now?
    I think the entire farce has been dealt a death blow.
    https://rumble.com/vkorz0-freedom-fighter-court-victory-ends-masking-shots-quarantine-in-alberta.html

  24. Muddy says:

    In a propaganda sense, President Trump was a godsend for the Chinese leadership. He provided them with a figurehead for the ‘Western imperialists conspiring to deny Asian dreams.’

  25. Whalehunt Fun says:

    The dog leavings that are the BBC have done the same with Dr Who.

  26. egg_ says:

    “In a propaganda sense, President Trump was a godsend for the Chinese leadership. He provided them with a figurehead for the ‘Western imperialists conspiring to deny Asian dreams.’’

    Trade sanctions with China were his greatest folly IMHO.

  27. Whalehunt Fun says:

    Macarthur wanted to nuke them till they glowed so his men could shott them in the dark. How stupid are his critics now. If China desolate radioactive wasteland the entire world be be a happier safer place. It’s not too late. A massive surprise first strike from submarines followed by a few hundred more icbm strikes is all it takes. It is all upside. I cannot see why even a senile dithering buffoon like Beijing Biden cannot see this.

  28. Zippster says:

    wheres the quote thingies?
    do any of these work test italics para

  29. Zipster says:

    Trump exposed china to the mainstream, seems many have their eggs or balls in the chicom mouth.

  30. Epicurious says:

    Karabar says:
    August 5, 2021 at 5:00 pm
    Is Covid over now?

    Interesting all the government PR mentions that the CHO has decided to remove all the restrictions but there is no mention of the litigation that caused this and the fact they lost.

  31. Lloyd says:

    I abhor the Chinese Communist Party and fear a world under their domination.

    Having said that, China has suffered horribly over the past few hundred years. Opium Wars (Fentanyl anyone?), European colonisation, Japanese brutality. I can’t wish nuclear annihilation upon the Chinese people whom I believe have been unjustly treated.

    I think it was hoped that China would move towards liberalisation with trade and modernisation. But it seems that won’t happen now. I suspect that information technology has perversely reenabled authoritarian control and indeed I think we are seeing parallels in the West (think cancel culture and episodes such as Sky News’s suspension on YouTube).

    The best case scenario is that the CCP collapses. But I am pessimistic about that prospect.

    The West needs to get its act together. We need to shift our supply chains away from China. We need to stop supplying China with strategic resources such as coal and iron ore. We need to decrease our reliance on Chinese rare earth materials. We need to do everything we can to bankrupt China in general and the CCP in particular. We must stop hobbling ourselves with stupid energy policies and dumber social policies which emasculate industry and our military.

    Unfortunately, I am pessimistic about this too. It is clear that the American government and civil society are hopelessly corrupt. Trump was on the right path and look what happened to him.

  32. Tintarella di Luna says:

    I think it was hoped that China would move towards liberalisation with trade and modernisation. But it seems that won’t happen now.,/blockquote>

    The Nixon/Whitlam experiment is dead – let’s not proceed any further – but as you say: \

    The West needs to get its act together. We need to shift our supply chains away from China. We need to stop supplying China with strategic resources such as coal and iron ore. We need to decrease our reliance on Chinese rare earth materials. We need to do everything we can to bankrupt China in general and the CCP in particular. We must stop hobbling ourselves with stupid energy policies and dumber social policies which emasculate industry and our military.

    Unfortunately, I am pessimistic about this too. It is clear that the American government and civil society are hopelessly corrupt.

    Spot on — if the West ceased all economic interaction with China, the CCP would be no more because the CCP relies absolutely on the West – and another thing China unleashed this manufactured coronavirus on the world – so reparations should be in the form of every nation beholden to China will not pay their debts as a form of reparations.

    But IT”S THE MUNNNNNNNEY and GREED of the corporates that is the problem. The CEO of Nike said that its brand is for China https://www.marketing-interactive.com/nike-ceo-says-its-a-brand-for-china-after-earlier-boycott-calls-over-cotton-row#:~:text=Home-,Nike%20CEO%20says%20it's%20a%20brand%20for%20China,boycott%20calls%20over%20cotton%20row&text=Nike's%20president%20and%20CEO%20John,market%20in%20March%20this%20year.

  33. Zipster says:

    We need to stop buying junk from china. Easier said than done, but it has to happen.

    https://www.youtube.com/watch?v=NPnqwTxMqv8

  34. Zipster says:

    Tariffs is the right thing to do with china, buying stuff from china is like buying back stuff that has been stolen from your own house.

    Tariffs should be progressively increased till people stop buying shit from china.

  35. Kneel says:

    “we need to stop buying junk from China.”

    Indeed.
    On the plus side, I can tell you that where I work we still manufacture some things in Australia, and that we not only export 2 containers a month to the USA, we also sell into China.
    We can manage this because we have a superior product – both quality and performance are unmatched globally, with us being a preferred supply to a US based global leader, who are asking for ever more versions.
    So it can be done.
    The big thing in my view is China’s freight subsidies – the only way they can post you a $2 item with freight included is massive subsidies.

  36. stackja says:

    On this day in 1945, Japan started to become a friend again. Red China need a shake up too? The world can exist without Red China. Can Xi dictatorship exist alone?

  37. Bruce of Newcastle says:

    It’s ironic that China may’ve encouraged infection of India on purpose back in early 2020 because now the Indian strain, also known as Delta, is currently running free in China.

    The Delta Variant Could End The Chinese Communist Party (5 Aug, via Instapundit)

    The Delta variant is spreading across the country fast, and Beijing has no answer to the new strain other than draconian, totalitarian brute-force measures—and blaming foreigners.

    Millions of Chinese residents are now in various forms of lockdown. The recent infections constitute the most widespread coronavirus outbreak since the disease first hit China, sometime in late 2019.

    The new flare-up, which quickly slipped beyond the control of the authorities, is undermining core Communist Party propaganda narratives.

    Chinese authorities trace the latest series of infections to a flight landing at the Nanjing Lukou International Airport from Russia on July 20. Nine Chinese airport workers tested positive after cleaning the plane.

    Since then, the disease has ripped through China, infecting people in almost half of the country’s 33 provinces and provincial-level cities and regions. “Delta has broken through the country’s virus defenses, which are some of the strictest in the world,” notes Bloomberg News.

    As Stephen Green says: “Don’t get your hopes up — Chang has been predicting the end of CCP rule any day now for 20 years.” But add in all the other disasters Xi has had in the last two years and you can see why things might not be going according to plan for him, professionally-like.

  38. When one looks at a satellite map of China and the many mountain ranges to its west, it seems as if there must be a whole shitload of coal and other minerals in those thar hills, so why aren’t they exploiting those resources?

  39. Rockdoctor says:

    Winston, they are there. I’d hazard a guess to say like their forays into oil years ago that depleted their north west deposits with wastage that incompetence, party nepotism and regional politics play a part. Coal however less so and it is very dirty, not good enough to make steel.

    As for Bruce’s mention of Gordon Chang, wow he still around shilling for a collapse. Problem is the western businesses is still kowtowing to get in on the rivers of gold even with the knowledge that they may lose a factory or two and some IP in the process. The profits they make in the meantime are huge. Some have mentioned above till we turn this off they will continue unchanged. My thoughts too…

  40. The Sheriff says:

    How can the West do anything about China when they’re too busy turning off the lights and turning their kids into trannies?

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