Strains between the US and China stem partly from the vast differences in the two country's cultural beliefs and outlook. Photo: iStock
A new Cold War between the US and China will inevitably impact the rest to the world. Photo: iStock. Photo: iStock

The acceleration of a new Cold War could be drastically ramped up at a landmark event taking place this Sunday.

Does that sound over-dramatic? No, I don’t think it does.

Chinese President Xi Jinping will this weekend give a major speech in Beijing at the Communist Party congress, which takes place only once every five years, and at which he will take on an unprecedented third term at the helm – putting him on track to be leader for life.

I expect Xi to set out an even more strident approach against the United States, his country’s main superpower rival, as both nations push to become the ultimate global dominant force militarily, politically, culturally, and economically. 

Xi’s speech follows the release this week of US President Joe Biden’s first formal National Security Strategy plan, which identified China as “America’s most consequential geopolitical challenge,” as well as the need to compete harder over the coming decade to keep up with the People’s Republic.

Bonnie Glaser, director of the Asia Program at the German Marshall Fund of the US, recently told Bloomberg: “I expect the US-China relationship to become more confrontational, not less.… I increasingly think it will take the shock of a significant crisis for the two countries to have a serious dialogue about how to peacefully co-exist.”

US-China relations have materially deteriorated over the last few years, it seems to me and most commentators.

Both are battling to control security infrastructures, trade, commerce and economic systems, the development and regulation of technology, as well international norms, practices and values.

China’s rapid military buildup, including the expansion of its nuclear capability, underscores Xi’s view that his nation’s armed forces be “commensurate with China’s international standing,” and it is causing significant concern in Washington.

Other issues of dispute in this field include self-governing Taiwan, which China sees as its territory and which the US has vowed to protect from any attempts by Beijing to move in; China’s construction and militarization of islands in the South China Sea; and China’s joint military operations with foes of the US.

Washington’s confidence in China has also been badly dented since Xi’s announcement of a “no limits” partnership with Russian President Vladimir Putin just weeks before his invasion of Ukraine.

“It shows the disdain that Xi Jinping has toward the US that he would be seen on a stage with Vladimir Putin, who is not a natural ally,” said Jon M Huntsman, a former US ambassador to both China and Russia. “It’s their shared antipathy toward the US that brings them together.”

in addition, the Covid-19 pandemic managed to weigh on US-China relations in many respects. These include that supply chains were severely disrupted by China’s zero-tolerance Covid policy, which meant that container ships were loitering outside ports and factories were shuttered. 

But as well, social and institutional engagement between China and the US has also declined. “Interactions between the countries’ universities, non-governmental organizations, creators, and tourists had declined before Covid and have slowed to a trickle since,” reports Time.

There’s no doubt that the antagonism between the world’s two most powerful nations has become more entrenched, more explicit, and more aggressive.

And to my mind, this all sets the stage for a new Cold War, which will have a global impact.  

It’s a view shared by former Thai prime minister Abhisit Vejjajiva, who was quoted by Time as saying: “All Southeast Asian countries now feel pressure to take sides between the US and China. There’s clearly a real risk for all the other countries in the world to feel that we’re now falling back into two camps.”

The effect of a new Cold War will be even more impactful globally than that of the first because of the economic interdependence of the world’s two largest economies. China and the US together account for more than 40% of the global economy.

This is why the world economy, and the futures of billions of people, are going to be largely defined by Xi’s speech on Sunday.

Nigel Green is founder and CEO of deVere Group.