The Rise of China & the New Cold War

The fall of the Soviet Union in 1991 marked the end of the 20th century Cold War and created a unipolar world largely under the hegemony of the United States of America (USA). In the 21st century, however, the geopolitical tide is turning once again owing to the meteoric rise of China and its dominant position in the world economy, which is vexing the imperialist bloc, hence setting the stage for a New Cold War.

Indeed, tensions between the US and China are at an all-time high, with the former Trump administration requesting Congress to allocate a whopping $705 billion defense budget solely to check the growing Chinese and Russian influence. Writing in an August 2020 opinion piece, Richard Haass, a former key member of the Bush administration, categorically declared that the probability of a cold war with China is high and the chances of a real war are also very high! This situation is further exacerbated by the spread of the COVID-19 pandemic, which made Trump pose as a war-time president facing the onslaught of a foreign invader or the ‘China virus’, a term he disparagingly used for the coronavirus. Besides fueling racial hatred for the Asian Americans, this war-time posturing of Trump has escalated the new Cold War and thwarted an effective global response to the pandemic. But with the change of guard at the White House, one can expect the current situation to improve or at least diffuse temporarily. However, this is a naïve hope, and the existing tense situation is expected to continue for reasons that I will discuss below. 

In recent history, China has remained a struggling low-income country, with a very large population and a weak industrial base. To top it all the country had a pervasive social problem of opium abuse, “thanks” to the British colonial diktats of unfettered opium trade imposed as a consequence of China’s defeat in the Opium Wars of the mid-19th century. The Communist Revolution of 1949 and the subsequent politico-economic policies adopted by Mao Zedong—such as the Great Leap Forward and the Cultural Revolution—also did little to alleviate the Chinese misery. It wasn’t until 1978—the year when China opened up to the world economy—that the country started witnessing a change of fortunes under the visionary leadership of Deng Xiaoping. In the years since then, China has adopted an aggressive import substitution industrialization (ISI) policy and has become the leading export hub to the world. Its Gross Domestic Product (GDP) has grown by 6% per year on average, and its economy doubles in size every twelve years. Hitherto, it is the second-largest economy in the world and is all set to surpass the US by becoming the leading economy in the world by 2028. Little wonder, then, there is a lot of anxiety among the dominant imperialist countries led by the US. 

To engage in this new Cold War, the triad of imperialist countries—the US/Canada, Western Europe, and Japan—are using new and unconventional means at their disposal. The imperialist bloc cannot use a policy of isolation and containment against China as it once used against the Soviet Union since the former plays a key role in global commodity and value chains. In this regard, the former Secretary of State Mike Pompeo rightly noted that the US cannot contain China because “China is already within our (economic) borders”. Rather, the triad is planning to engage China in a hybrid—also known as the 5th Generation or Non-Contact—warfare targeted at the ideological, political, economic, and cultural aspects of Chinese society. The plan is to weaken the Chinese state by attacking the Communist Party of China (CPC)—which has played a key role in China’s rise as a superpower—to exploit its internal and external contradictions. Once the Chinese state weakens to a certain extent, then the US, along with its allies, will move in and reshape the Chinese economy and society in the neoliberal order. In the league of nations, the US will then defend its actions by blaming China for its “incursions” in the South China sea, and in this imperialist plot, India is likely to play a dominant role as the Empire’s regional aider and abettor. 

However, much to the US chagrin, China is hedged against this imperialist onslaught by a combination of internal and external factors that work in its favor. On the external front, China is connected to the entire global economy in an intricate weblike fashion. Political instability in China means that the global commodity and supply chains are adversely affected, thereby bringing to halt the economic wheel of almost the entire world, especially in the Western countries. Secondly, China has developed enormous political and geostrategic clout via its Belt and Road Initiative (BRI), especially in the global South. The multibillion-dollar investments of BRI in the fields of energy, infrastructure, roads, information technology (IT), ports, and railways are greatly helping the least developed countries (LDCs) in their development and economic revival. Consequently, the diplomatic and politico-economic influence of China is growing by the day and appears irreversible.

Internally, the legacy of the Communist Revolution remains strong, as reflected by a spirit of camaraderie among the Chinese people and their favorable view of the CPC. Even more important is the Chinese economic management, which includes a large public sector, state-control of the banking & financial sector, and the absence of private property in agricultural land. Indeed, it is precisely the tight regulation of the banking sector that has allowed China to hedge against the financial might of the US dollar. In fact, according to political economist Samir Amin, much of the Chinese economic miracle is a result of the regulations imposed on Chinese banks and other financial institutions; to give them up is tantamount to handing over the key of its (China’s) economic success to the international centers of global capitalism. 

Secondly, the self-sustenance of China in food and agriculture serves as the backbone of its robust economy. This is mainly attributable to the rural social relations of production, which to this day, revolve around the communal ownership of land, although the reforms of 1978 have tainted it a bit. While the prophets of neoliberalism rarely get tired of extolling the “virtues” of private property, the fact is that owing to the communal property, the industrious farmers of China have been able to grow food for 22% of the world’s population over just 6% of world’s arable land!

Moreover, the CPC is also devising inclusive socio-economic policies to integrate the Chinese hoi-polloi, as a way to deter the enemy in hybrid warfare. For instance, in 2017, the Chinese state introduced the policy of ‘rural revitalization’, which called for creating an inclusive (rural) economy based on sustainable development while strictly eschewing the principles of Western neoliberalism. Similarly, its policy of ‘Ecological Civilization’ focuses on protecting the environment while maintaining economic growth simultaneously. Chinese president Xi Jinping also wrote a notable article last year, in which he asserted the need to return to the principles of Marxian political economy while continuing with the people’s revolution. 

Hitherto, all the signs indicate that the Chinese state is adamant in protecting the non-capitalist and the non-class substructure of its political economy. Also, it is keen to safeguard its public sector and communal land ownership from any exogenous or endogenous threats. These policy responses have emerged partly due to internal constraints, but mainly due to the ideological onslaught of Western neoliberalism on the back of globalization. However, whether the Chinese state will continue to successfully protect its local and global interests from the hybrid maneuvering of imperialist powers is an open question and something that only time will tell.