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On October 4th 2018, Mike Pence, the United States Vice-President, in his speech signalled a dramatic shift in America’s approach to Beijing. In the light of escalating tensions between the two superpowers, his speech sounded ominously like a de facto declaration of cold war. With the ongoing trade wars between the two superpowers, a cold war though is unlikely to occur, but no one expected the intense trade war to advance this far. The trade war between the US and China has a lot riding on. It's not merely a showcase of economic strength but also a gamble by China to eventually replace America as the hegemon. The US acted as the guardian of democracy, liberalism and upholder of human rights. It condemned China’s record on human rights at home and an aggressive expansion abroad. However, many Chinese see America as a hypocrite that commits all the sins it accuses China of.

In April, president Donald Trump accused China of stealing trade secrets, coercing American firms into technology transfer and other unfair trade practices. Since then Trump has imposed a series of punitive tariffs amping up their severity and vowed not to stop until he gets his way. China pushed back imposing tariffs up to $60 bn of American imports. The trade war has intensified over the months with no sign of either country backing down.

The ongoing trade hassle between the two countries has a lot of important repercussions. First, since the end of the Cold war, America’s supremacy over the world has not been challenged. After governing the unipolar world over a decade, it finally has a competitor that can beat her. China’s economy has been rapidly growing since its independence. It made a remarkable transition from socialist to a market economy. During the financial crisis of 2008, China was the first country to bounce back in the market. The financial crisis of 2008 was a major setback for America but China, it was a reaffirmation of the fact that its economy is becoming stronger compared to the US.

With its increasing economic might, focused political leadership and assertive military tendencies China is focused on fulfilling its Chinese dream. The Chinese dream is China’s ambition to regain its position as a world leader in science and technology as well as in economics and business. This also implies the resurgence of Chinese civilisation, culture and military might and China participating actively in all areas of human endeavour. Though China’s dream does not intend to challenge US’s global leadership but the ambition to become a world leader will inevitably challenge US’s role as world leader. It had been claimed that by 2035 (or even sooner) China’s economy will overtake the US, and thus, become the world’s biggest economy. Taking these facts into consideration, China is the main economic competitor for the US. 

Second, the trade war if not solved, sooner than later will eventually engulf the whole world. The trade war has already affected some countries like South Korea, Taiwan, Singapore, and Ireland. Due to globalisation, the economy is intricately connected than ever before. So if one chain of production is disrupted, it affects the entire global chain of production. These countries are highly connected to supply chains with China, and therefore, due to the trade wars, they are caught up in the crossfire. If the intensity of trade war continues to increase, then it may have economic repercussions across the world. 

Third, the trade war is accompanied by China's military assertiveness in the South China Sea. Recently, the Chinese naval vessel came within 45 yards of the USS Decatur as it conducted freedom-of-navigation operations in the South China Sea, forcing American ship to manoeuvre to avoid a collision quickly. The United States takes this as an act of intimidation to push America from the Western Pacific. This spells trouble as the risk of armed confrontation in the South China Sea increases with the escalating tensions between two superpowers.

The questions remain, will this trade war escalate into another cold war?

A war between the US and China though is unlikely to occur due to economic and commercial interest but also because a war in today’s time might result in a nuclear war. The world survived two world wars, but it would not be able to withstand a nuclear war. America fears that time is on China’s side. It had been claimed that by 2035 (or even sooner) China’s economy will overtake the US, and thus, become the world’s biggest economy. From the US perspective, it’s better to deal with China now when China is not as powerful as the US.  Unfortunately, it is a bit late, since China with its aim to become a world power will see this through no matter the cost. However, it must be taken into consideration that the main objective of China is to rise internationally and create a mark of itself. In this regard, the goal must not be to intimidate China since it is an economic giant and will not be bullied into following the American led global ‘order’. Instead, China should be peacefully coerced into a path to join the world order as a ‘responsible stakeholder’. A zero-sum attempt for containment of China will only lead to conflict. China and the US would have to come to a peaceful understanding. Since a new cold war will break the threshold of fragile peace on which the world rests.  

Reference

China v America. (2018). The Economist, 13.

HEYDARIAN, R. J. (2018). US, China thrusting towards a new Cold War. Asia Times.

Retrieved from: http://www.atimes.com/article/us-china-thrusting-towards-a-new-cold-war/

PICKRELL, R. (2018 ). 'We will not be intimidated' - Mattis doubles down on US vow to counter China's attempts to dominate the South China Sea. Business Insider India.

Retrieved from: https://www.businessinsider.in/We-will-not-be-intimidated-Mattis-doubles-down-on-US-vow-to-counter-Chinas-attempts-to-dominate-the-South-China-Sea/articleshow/66287010.cms

Stumo, M. (2018 ). Pence's little-noticed speech marked a new US realism toward China. Washington Examiner.

Retrieved from: https://www.washingtonexaminer.com/opinion/op-eds/pences-little-noticed-speech-marked-a-new-us-realism-toward-china

Image credit: Asia Times

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Written By Simran Galipothu

I try to weave a story through my words. A story often unsaid and unheard by others.

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