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Lately we’re seeing the US-China relationship increasingly called a ‘Cold War 2.0’. So this week we ask:
🥶 What does ‘Cold War 2.0’ really mean, and does it matter?
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🤷♀️ What does ‘Cold War 2.0’ even mean?
To answer that question, we must look deep inside ourselves… but who has time for that. Instead, we’ll just look at the OG Cold War and what folks mean when they compare the two. We do love us a bit of tl;dr history...
We all know that the Soviet Union disbanded in 1991...
Okay, sorry, I couldn’t help shoehorning in a Simpsons reference, which dates me. Anyway, more seriously, Cold War 1.0 was:
A decades-long struggle for global influence between the US and the Soviet Union (and their allies). It started in the aftermath of WW2 in 1947 and ended in dramatic fashion with the iconic fall of the Berlin Wall / unification of West and East Germany.
An ideological struggle at its core between individualism and collectivism (aka capitalism and socialism) as a model for the rest of the world. The war’s end triggered galaxy brains like Francis Fukuyama to announce the ‘end of history’, because the Soviet Union’s collapse meant that there was no longer any real competition to liberal democracy and the market economy. Wop wop – Fukuyama has since ‘postponed’ the end of history.
Not a conventional battle fought directly between the US and Soviet Union. Instead, they fought proxy wars like the Korea and Vietnam Wars, all the while building up their respective nuclear and conventional weapons arsenals to comical (but actually very unfunny) levels:
On top of that, there was no shortage of near misses – it’s truly a miracle we’re all still here.
Other hallmark features of Cold War 1.0 included:
propaganda campaigns and disinformation operations
espionage (still providing endless cloak-and-dagger fodder to spy novelists)
trade embargoes and sanctions
fierce sporting rivalries (sometimes leading to great films)
the OG space race (Elon is so derivative)
Which of those features exist between the US and China today?
📖 Ideology. These days, China is busy trying to export its ‘strongly state-controlled’ model of growth to developing countries - particularly in Africa - as an alternative to the US’ ‘chaotic’ capitalist model.
Traditional Leninist-style socialism has levelled-up into ‘socialism with Chinese characteristics’. Learning lessons from the collapse of the Soviet Union, the Chinese Communist Party (CCP) has introduced political and economic reforms that have allowed China to integrate with the international system.
Since the 1980s, Chinese socialism as a national ideology hasn’t intruded too much into the lives of its citizens (though I remember having to wear little red scarves to school – no scarf, no entry to school!).
That was until President Xi Jinping decided to revive a more Maoist, personality-cult-red-book-waving version of socialism.
🔫 Military buildup: The current US-China military buildup is shall we say… worrying. The US government now sees China as a ‘near-peer’ competitor (military speak for “they’re getting too bloody close for comfort”).
China is challenging the US in multiple areas. China’s Navy and Air Force are now the largest in the Indo-Pacific region. China is also increasing its arsenal of scarily-accurate rocket systems at all ranges, diversifying its already impressive nuclear arsenal, and eroding the edge that the US had in space, despite the US Space Force (we see you smirking).
👜 Handbags-at-five-paces diplomacy: China’s style of diplomacy is less panda friendship and much more wolf warrior. Long gone are the days of Chairman Deng’s ‘bide our time and hide our strength’ strategy - China under Xi has decided it’s had enough of pretending it can’t whoop ass.
Instead, China has now gone full honey badger, not caring how the US and critics perceive it. China runs influence operations in places like Taiwan, Australia, and Central Asian countries and simultaneously runs cyber offensives to gain control of those countries’ domestic politics.
You know, all the things the Soviets used to do.
🔭 Internal control: Since President Xi came to power, the CCP’s internal policy debate mechanisms have all but disappeared. The CCP has increasingly tightened its grip over foreign media, rule of law, political dissent, and even organised religion.
China critics love to pick out Orwellian examples of state control, and lately Xi has obliged them by restricting gaming hours for teens and banning ‘effeminate’-looking men from appearing on Chinese TV:
The CCP is starting to reach into the lives of citizens like it once did under Mao, or like the Soviet Communist Party did under its most controlling leaders.
💰 Economic control: Increasingly, China’s also challenging the US-centric monetary system through its Central Bank Digital Currency.
As we’ve written before, China’s doing this to gain economic control, avoid sanctions linked to the USD, and gain economic leverage over other countries with its non-USD global pay systems. Though this doesn’t have a direct analogy to Soviet times, it is yet another ‘cold battlefront’ between the US and China.
So, if those are the similarities between US-Soviet and US-China competition, what are the differences? But first…
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🦾Why the US-China rivalry is different
Two words: globalisation and technology.
It’s obvious that the interconnected nature of the modern world is starkly different to an era when an empire 2.5x the size of the US was, quite literally, walled off from the rest of the world.
But, because anyone who was in high school after about 1995 has had 'Globalisation: causes and effects' drilled into them ad nauseam, I'll save you the PTSD of rehashing all that.
Instead I’ll focus on what I think is the most important difference between Cold War 1.0 and Cold War 2.0….
Both the Soviet and Chinese governments aim(ed) to exert a high-level of control over their populations. But the two regimes have (had) very different ways of achieving this.
The biggest difference is the rapid technological advancement made since the fall of the Berlin Wall:
Technology in the latter half of the 20th century didn't allow for the total control of people at all times. That could only be approximated by using physical tools like borders, secret police, identification papers, etc. But those methods were expensive, and costs expanded with the size of the state.
In contrast, modern China is building the technological equivalents of those physical tools: Real ID via smartphones, real-time censorship of social media and messaging apps, ubiquitous facial recognition, and more. These are the modern CCP's ways of perfecting what the Soviets tried to achieve.
In my view, understanding technology as the key difference is crucial. Never before has it been possible to:
know what everyone is doing at all times
process that information within an actionable timeframe
break the link between increasing marginal costs and the expansion of surveillance
[The] critical factor that makes tech companies unique [is] the zero marginal cost nature of software...venture capitalist fund tech companies are characterized by a zero marginal cost component that allows for uncapped returns on investment.
- Ben Thompson
Replace 'venture capitalist' with 'state', and 'tech companies' with 'state-owned surveillance companies’, and you start to grasp the difference.
Consider that each additional border crossing for the Soviets required the added fixed expense of more guards.
But once the modern CCP develops and rolls out a facial recognition system, scanning 100,000 people per day is more or less as expensive as scanning 10 billion per day.
The rapid development of computer processing power, the internet, and AI make it almost certain that China will successfully develop a cost efficient, all-seeing panopticon.
👴Modern China has learned from Soviet mistakes... or have they?
I lied, there’s a third word: history.
The modern CCP is hellbent on not repeating the mistakes of the Soviet Union. In fact, this was so front of mind for CCP officials that I barely attended a meeting in China where “we have studied the USSR deeply” wasn’t dropped into conversation to remind me that, this time, the West wouldn’t have it so easy. 😂
But make no mistake - the modern CCP was born in the Stalinist era and still has Soviet DNA:
Today’s official China believes that nothing deep or fundamental was wrong with the Soviet Union even in the late 1980s.
According to the Chinese official narrative, the failure of the Soviet regime to continue is not attributable to a broad systemic phenomenon, but rather to a very specific failure of the Communist Party of the Soviet Union.
- Arthur Waldron, Lauder Professor of IR at the University of Pennsylvania
Why do we insist on framing the US-China relationship as a Cold War 2.0?
In some ways, whether or not we’re in a Cold War 2.0 doesn't really matter. We know we’re entering an extended period of competition between two superpowers.
So why have governments (the Chinese government uses the term ‘cold war’ more than all other governments combined), the media, and analysts chosen to us the Cold War 2.0 framing?
1. As shorthand to understand the change in geopolitical dynamics
The US and China has each openly called the other a ‘strategic competitor’ (diplo speak for adversary), and any pretence that China will liberalise is long gone.
What's the most recent adversarial contest between superpowers? The Cold War. ‘Cold War 2.0’ does the job of communicating the sharp change in the relationship nicely.
2. To remind us of the threat that belligerent superpowers pose to us all
I'm going to quote extensively from a recent podcast with the famous (and somewhat controversial) historian Niall Ferguson:
We haven't had a big war in a while.
The US and China are doing all the things that you would do as two superpowers if you were going to have a really big war in the next ten years - quarrelling about multiple issues, underestimating each other's capabilities.
I see the probability of a significant conflict as quite high, and what history tells us is that stuff really does kill people.
- Niall Ferguson
Cold War 2.0 framing gets that message across loud and clear. But it's also overly simplistic:
We often think of the Cold War as a cold nuclear war, where nuclear weapons meant Armageddon or peace. The reality is more nuanced: a limited nuclear war is something that will happen at some point, the surprising thing is that it hasn't happened yet.
Henry Kissinger said in the 1960s that limited nuclear war was essential for the US to triumph over the Soviet Union, because the US didn't have a great prospect of winning a conventional war.
- Niall Ferguson
Indeed, NATO planned to stop a Soviet invasion of Europe through tactical, battlefield nuclear strikes.
So perhaps thinking about Taiwan - which is the obvious potential flashpoint between the US and China - in Cold War terms is helpful. Understanding that a battlefield nuke might be used in Asia before the decade is out ought to give even the most war-mongering China critic pause for thought.
Most of us in the knowledge industry will, if we’re being honest, identify with the horror of being required to really think about things. Speaking for myself, it's exhausting, and I’m exhausted.
It’s far easier to dust off a classic framework from the past, jam in the facts of the present to fit, and be down the pub in time for knock-offs, than it is to sit down and come up with novel ways of understanding the world.
I give you this attempt to revive the Cold War 1.0 era domino theory in 2021:
To be fair, the main sources of the “This is a Cold War 2.0” messaging - governments and the media - work within time constraints that make deep analysis difficult.
But based on my experience in those worlds, I think a lot of the Cold War 2.0 messaging is laziness. It is a fact that human bureaucracies tend to incentivise 'not reinventing the wheel'.
Remember nothing is inevitable
Ultimately, quibbles about whether the US-China relationship is or isn't a Cold War 2.0 mostly boil down to political d*****baggery and twitter f***wittery.
There is undoubted value in communicating the essence of the dynamic crisply, but only if the context is taken as understood. The problem is that, as with so many political or advertising slogans, reducing something infinitely complex to a few words strips it of all meaning.
Reading the news these days definitely makes one believe that a Cold War is inevitable. But I wonder how much framing of the US-China relationship in those terms, determines how it develops.
Put more simply: does calling the US & China relationship 'Cold War 2.0' make it more likely that it will become so? Based on how close Cold War 1.0 came to ending the world, we should all fervently hope not.
➕ Extra intrigue
Hundreds of people protested the new head of the Serbian Orthodox Church in Montenegro’s city of Cetinje this weekend. Although Montenegro declared independence from Serbia in 2006 and has been trying to cosy up to the EU since, many of its religious institutions remain under Serbian influence.
Crypto bros rejoice: on 7 September, El Salvador will become the world’s first country to recognise Bitcoin as legal tender. Surveys show that 68% of Salvadorians disapprove of the governments decision. That’s hardly surprising given only 4.8% understand what Bitcoin is.
India and France will launch a bilateral space security dialogue, aimed at addressing the rapid growth of China’s space capabilities. India is clearly worried about its neighbours capabilities as it has also discussed space security issues with Japan and the US.
Despite being despised by every human being on this planet, mosquitos got a whole day dedicated to them on 20 August. Apparently, the mosquito day commemorates the 1897 discovery that female mosquitoes are responsible for transmitting malaria. How DELIGHTFUL. But some mozzies, like the world’s ‘most beautiful’ mosquito from South America, might be worth appreciating.
Thanks for reading. For those playing at home, this is our 44th edition - and yes we’re as shocked as you are.
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