The Cold War shaped global alliances; today, a new Cold War emerges between the US and China, driven by trade, tech, and influence. Tensions peak over Huawei, 5G, Taiwan, and economic competition
Tariq Aqil
The Second World War ended in 1945, giving birth to the Cold War, the war of ideologies, when the entire world was divided into two camps: the Communist camp led by the USSR and the capitalist camp led by the USA. The USSR and the USA had been military allies and together, along with the UK, they managed to defeat the Axis powers of Germany, Italy and Japan.
During the Cold War between 1945 and 1990, both sides used all the means at their disposal to create spheres of influence for themselves, and throughout the Cold War, the world community was divided into two distinct camps. The USA created the military alliance of NATO, and the USSR responded by creating the military alliance of the Warsaw Pact. The USSR used strong-arm tactics and military might to coerce other countries to join their camp, while the USA used the power of money, generous financial assistance, and the transfer of technology to lure other countries to their side.
In the twenty-first century, there is a new Cold War on the horizon, and this appears to be different in the political or military sense from the first Cold War post-World War II. Today, the two main protagonists in the new Cold War are the People’s Republic of China and the USA. In the first Cold War, the USSR failed miserably to attract more countries to its side, while the USA was far more successful using its soft policy of aid and grants through the Agency for International Development (USAID).
The USSR invaded Afghanistan in December 1979 and suffered a crushing defeat, resulting in the collapse of the USSR by 1990. The USSR split into 15 independent countries, namely Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. Even today, Russia is bent upon applying strong-arm tactics and military power, as seen in its adventure in Ukraine. China, on the other hand, is using its economic power and lending a helping hand, such as through the China-Pakistan Economic Corridor (CPEC), to many countries to improve their economic conditions. Washington managed to increase its areas of influence, and China today is following the same policy of aid and assistance to create friends and expand its influence in the world.
US-China rivalry is also intensifying in the forums of international organisations, as was recently seen against the backdrop of the COVID-19 pandemic at the World Health Organisation (WHO) or the election of a new ICT leadership
The US-China relations today, in the second Trump presidency, are severely strained, and this is reflected in US strategic documents. It was indicated in the 2017 National Security Strategy of the USA: “China and Russia challenge American power, influence and interests, attempting to erode American security and prosperity.” This document was also critical of the previous administration’s policies directed at making China a “responsible stakeholder.” The January 2018 National Defense Strategy, meanwhile, proclaimed the return of great-power competition, calling China a “revisionist power” and a “strategic competitor.”
US assessments of PRC policy expressed in these strategies quickly translated into real action. The Trump administration, in addition to continuing its support for Taiwan, began to make stronger demands on China to reduce its roughly $350 billion trade deficit and to better protect intellectual property. Forced technology transfers and intellectual property theft were expected to cost US companies $300 billion a year, leading to a trade war. In April 2018, the US announced a list of 1,333 high-tech products worth $46 billion to be subjected to 25 per cent tariffs. As the list expanded, tariffs were introduced in successive tranches worth $34 billion, $16 billion, and finally in July 2018, as much as $200 billion, which was met with analogous actions from the Chinese side against the US.
After months of mutual imposition of tariffs on subsequent products and difficult talks, in mid-January 2020, the two sides concluded a so-called “first phase” trade agreement, meeting some of the US demands. China pledged, among other things, to purchase an additional $200 billion worth of goods and services over two years. The US-China rivalry can now be seen to its fullest extent in the technological dimension. It intensified significantly during Donald Trump’s presidency, when the United States began to look more closely at the Chinese company Huawei and Chinese 5G technologies.
In December 2018, Meng Wanzhou, Huawei’s executive vice president and chief financial officer, was detained in Canada at the request of the US government, accused by Washington of circumventing US sanctions on Iran. At the same time, the US sought to discourage allies from using solutions provided by the Chinese giant as potentially threatening to ICT security due to the company’s close ties to the PRC government and the associated intelligence threat. Washington, thus, threatened allies wishing to continue 5G technology cooperation with Huawei with the possibility of limiting intelligence and military cooperation with the US.
The US administration also accused the company of embezzlement, money laundering, and intellectual property theft. Although China argued that the charges were politically motivated and intended to eliminate Chinese companies from the lucrative 5G market, in mid-May 2019, the US decided to put Huawei and its affiliated companies on a “blacklist” of entities that must seek special approval from the US government to acquire US components and technologies. This represented an impediment to the company, as it was denied access to components and software updates provided by US companies.
In May 2020, the Department of Commerce imposed further restrictions on Huawei, which required, among other things, manufacturers of semiconductors—including foreign ones—to obtain special licences to sell them to Huawei if they were created using US technology. This mainly affected Taiwan’s TSMC, which supplies 90 per cent of semiconductors to Huawei. The restrictions were further strengthened in August 2020, also expanding the catalogue of Huawei subsidiaries in other countries that were subject to restrictions.
US-China rivalry is also intensifying in the forums of international organisations, as was recently seen against the backdrop of the COVID-19 pandemic at the World Health Organisation (WHO) or the election of a new ICT leadership. China is trying to increase its influence in individual organisations like the WHO—for example, by filling leadership positions with its candidates and “buying votes” of developing countries—because of its vested interests.__Courtesy The Friday Times Pakistan
