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How to handle the New Cold War

The second cold war with China arguably began with Xi Jinping’s second term as Secretary General of the Chinese Communist Party in 2017, with Donald Trump’s trade war a year later, with the changed status of Hong Kong and with the increased salience of the Taiwan issue.

China’s marginally ambivalent but plainly visible alignment with Russia on Ukraine has also given the second cold war a crucial new dimension.

Second, a factor common to both cold wars is that most nations prefer to duck them. In the first cold war, most of these countries came under the banner of the Non-Aligned Movement. There was a tendency in the west to regard them as, well, a bit wet.

Big, hot wars don’t usually begin without strong public antipathy for an enemy.

But many of these same countries have more clout now. Generally known as the global south, they are wealthier, bigger and increasingly assertive. They are being courted heavily by China, and to a lesser extent by Russia.

There is recognition in the west that the demands of the second cold war require an inclusive approach to global-south concerns. (Indeed India, which sees itself as a leader of the global south, is also aligned with the West in the Quad). But our foot cannot be allowed to come off the policy accelerator.

Third, there is one huge difference between the two cold wars, but one that cannot be lost in our policy thinking.

In the first cold war, trade between the west and the Soviet Bloc was limited – an aspect of containment. (In the 1960s and 70s about 60 per cent of Soviet trade was with other socialist countries and in the 1970s and 80s, US-Soviet trade was only about 1 per cent of each country’s total. There was not much economic ballast in the bilateral relationship.)

China’s economic relations with the rest of the world and above all with America are of an entirely different order. There are a wide range of views in the US on current economic engagement with China, from those who see the economic benefits of engagement as outweighing the risks, to those who advocate an almost complete split with China.

Fortunately, US Treasury Secretary Janet Yellen, while guarded, on 20 April warned against “a full separation of our economies”.

Incidentally, the Chinese need to think about this too. A report in Nikkei Asia this month suggested that as far back as November 2012, Xi Jinping was expressing views on the need to prevent the Chinese economy from being “hijacked” by the US.

A serious decline in economic engagement between the West – particularly the US – and China would remove some of the ballast important for international stability which the US/China relationship has and which the US/Soviet relationship did not have. As Yellen says, US/China economic disengagement would also have disastrous flow-on effects for the rest of the world.

Fourth, we need to keep thinking about solutions.

During the first cold war, the Americans, Soviets and others had their best minds working on management of cold-war problems. The central, but not sole, focus lay in diminishing the nuclear threat.

There has recently been some serious thinking in Australia about how best to confront this second cold war: moving beyond the standard acknowledgement of the sanctity of ANZUS and the merits of AUKUS and the QUAD and including sensible engagement of China. But we have a way to go.

Foreign Minister Penny Wong has argued the case for multipolarity, the concept of a number of nations or groups achieving stability through balancing each other. This is a fine argument in theory, but might have had greater cogency a few years ago before, for example, Russia and China closed ranks, before the UK left the European Union and when prospects for ASEAN unity were a bit better than they are today.

Equally, talk of multipolarity is inconsistent with repeated references over the past couple of years to “minilateral” groups such as AUKUS and the QUAD as part of a new structure designed to keep the peace. To most people (including, unsurprisingly, the Chinese) they look like quasi-alliances with the US targeted at China.

And the “minilaterals” are not tidy groupings that fit neatly into conceptual frameworks. Rather they are strategic clusters – and messy.

The Sino-Russian agreement, which is a “minilateral” too (yes, even if not one of ours), has yet to send lethal Chinese weaponry to help Russia in the Ukraine. The QUAD’s democratic overlay suffers from the imperfection of Indian Prime Minister Narendra Modi’s concepts of governance and from India’s stance on the Ukraine. And French President Emmanuel Macron’s views on Taiwan may have damaged post-Ukraine improvements in NATO cohesion.

A fifth and final point is that in this new cold war, national leaderships should show restraint in actions and comment.

Big, hot wars don’t usually begin without strong public antipathy for an enemy. When feelings run high it is easier to start wars and harder to stop them. We need to understand other perspectives and that public sentiments, not just governments, engender conflict. Perhaps time for Churchill’s well worn adage: “Jaw, Jaw is better than War, War.”

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