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Is America Prepared for the Next Cold War?

It was once a common assumption of American foreign policy that, through open trade and good relations, the United States could integrate communist China into the peace-loving, rule-bound family of commercial nations. It was also widely thought that commerce and economic growth would help China evolve domestically to a more democratic and rights-based system. These were not crazy notions. The encouragement of international peace through commerce reprises the doux commerce thesis advanced by Montesquieu. And, indeed, most nation-states in the West began as relatively authoritarian governments and democratized as a middle class grew and saw political pluralism as necessary to protect its wealth.

But it is clear now that this policy has failed. China is not living up to its agreement in Hong Kong, but instead is moving to destroy its freedoms. It oppresses Uighurs because their religious faith and cultural identity do not fit the communist party’s demand for uniformity. It continues to threaten Taiwan and recently dropped “peaceful” from its policy of reunification with the island. It is building artificial islands in international waters in the South China Sea to project its power throughout the region. It has launched attacks on neighboring India in the Himalayas. It has engaged in industrial espionage and hacked into United States government personnel files. Domestically, it is becoming more authoritarian and less tolerant of dissent. It has entrenched the Communist Party’s power under a single leader, Xi Jinping.

It is hard to know exactly what went wrong, but the basic difference between previous historical examples of authoritarian transformation and China is that the latter is a communist regime. Domestically, the Communist Party has been in a better position to crack down on civil society than monarchs or dictators of previous ages, and a vibrant civil society may be a necessary dynamo for an evolving democracy. China also did not have as independent a corporate sector that pressed for a more quiescent foreign policy to advance economic objectives.

If the previous policy toward China failed, are we in for a new Cold War, as suggested recently by Rep. Mike Gallagher in the Wall Street Journal? The original Cold War was a great success, though fraught with peril. It helped defeat the Soviet Union and liberate subject nations under Soviet domination. Except for the imprudent intervention in Vietnam, it was fought through legal mechanisms, international institutions, military build-up, and ideological assertiveness. Ultimately, we won because we had a more prosperous and otherwise attractive society than the Soviet Union: the evil empire could no longer command even the modicum of allegiance needed to survive.

It seems sadly clear that the United States is not in nearly as good a position to wage a successful Cold War against China today. Let us begin with some of the institutions that helped win the Cold War for the United States. One was freer trade, like that constituted by the General Agreement on Tariffs and Trade. This institution increased economic growth and strengthened the bonds between the nations that opposed the Soviet Union. Unfortunately, however, the United States gave up on the Trans-Pacific Partnership in 2017. This agreement would have created a free trade zone among nations of the Pacific, many of which are crucial allies against a rising China. Donald Trump refused to ratify the agreement, but the failure was bipartisan. During the campaign, Hilary Clinton came out against an agreement she herself had helped negotiate! The United States now cannot make important new trade agreements even when the reasons are as compellingly geopolitical as they are economic.

Immigration policy was also a powerful tool of the Cold War. Congress passed the Jackson-Vanik amendment to the Trade Act of 1974, making trade relations with the Soviet Union dependent on permitting emigration from the Soviet Union to the United States. It also granted refugee status to Jewish emigrants. Senator Henry (Scoop) Jackson thought that “if people could vote with their feet, governments would have to acknowledge that and governments would have to make for their citizens a life that would keep them there.”

Our economic growth rate has fallen. We have experienced great civil unrest. The nation is polarized into tribes. We seem more divided and internally weak than we were for most of the Cold War.

Today, one such method of ideological combat would be to offer refugee status to those fleeing Hong Kong. In addition, we could permit the many Chinese students at our universities to stay on, should they choose, so long as we scrutinized them for any possible ties to Chinese security agencies. One aspect of a modern cold war is the battle for talent. But it seems doubtful that the United States could pursue such bold immigration policies, mired as we are in debates over illegal immigration.

Control over the wireless network is another example of technological competition where the United States seems to be failing. Huawei, a company responsive to the Chinse government, is the leading contender to build 5G systems all over the world. So far, the United States has not succeeded in discouraging key allies (including, until very recently, the UK) from using the company. Incredibly, the Federal Trade Commission is pursuing an antitrust complaint against Qualcomm that our own Justice Department says will entrench Huawei’s power. In 2020 we seem unable to bring together our own agencies to pursue a coherent policy of containment, let alone pressure other nations to do so.

The United States also seems incapable of forging a geopolitical strategy to contain China. In response to the danger of the Soviet Union, Nixon made an opening to China to forge a tacit alliance of convenience. Today, a carefully deliberated modus vivendi toward Russia seems necessary on the same grounds. But neither of our political parties is moving toward this goal in a sensible way. President Trump wants to invite Russia to the G-7 and cut troop levels in Europe without demanding concessions from Russia first. The foreign policy establishment, reflected in Democratic Party policy, wants simply to crank up sanctions on Russia, not seeming to recognize that this declining nation, while no more a reliable friend than China was in the 1970s, is no longer our principal adversary.

But even these individual policy failures, as problematic as they are, do not capture how much worse the position of the United States is vis-à-vis China today than it was vis-à-vis the Soviet Union. Most importantly, China is no Soviet Union. The Soviet Union had a command-and-control economy that utterly failed to satisfy the basic needs, let alone the economic aspirations, of its people. This failure was at the root of its implosion. China is substantially open to the market with very high growth rates. Although these growth rates will slow, there is currently no prospect of economic stagnation, much less collapse.

The United States appears much more divided and internally weak than it was for most of the Cold War. Our economic growth rate has fallen. We have experienced this summer the greatest civil unrest since the 1960s. The nation is polarized into tribes. That is one of the principal reasons why we would have difficulty sustaining the kind of policies that made for winning the last cold war.

To be sure, the 1960s was also a turbulent time. But there was an optimism then that giving equal rights to all in a liberal society would move us toward social harmony. There is no such optimism today.

In short, the contest is not between a sclerotic Soviet Union and a prosperous United States confident of its founding principles of liberty. Rather, it is between a China that combines the market with despotic social control and a nation divided by the politics of identity. Deng Xiaoping famously told his comrades to act cautiously in foreign policy in the 1980s: “Hide your strength, bide your time.” Sadly, it seems to have been wise advice not only because China has become much stronger, but because America has grown substantially weaker.

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