A remaking of the Cold War?

The recent G20 in Bali, Indonesia, was a long-awaited summit, involving in first person the two leaders of the World's uncontested superpowers. The simple fact that such a face-to-face meeting between US President Biden and the Chinese leader raised high emotional hopes is a confirmation of the miserable status of the relationships between the two countries. After years of tensions, reactions, counter-reactions, these relationships are now on the brink of a dangerous collapse. Not to speak of the fact that the World's two largest economies are already at war – a war fought, for the moment luckily, by means different from those currently employed by Vladimir Putin. But nonetheless, a crude war which aims at containing the opponent economically and technologically.

Tensions and summits bring back to our present time another phase in the recent history of the World, characterized again by the confrontation between the two superpowers that emerged from the Second World War, the US and Soviet Union.

Historical parallels are simultaneously fascinating but dangerous, too, particularly when they are used to strategize in the realm of international relations. Still, the question is fascinating: are the US and China engaging themselves in a new Cold War?

The Cold War which ended in 1989 was a conflict, even if of a very peculiar nature. It was a both an ideological and geopolitical confrontation. Ideological because it was a fight between two opposite visions of the World, a liberal capitalist one and an egalitarian socialist one. Geopolitical because, given the impossibility of a direct confrontation brought by the nuclear deterrent, the clash was transposed into the "conquest" of physical and metaphysical "spaces", realms of control and territories of power. These included poor new nations emerging from the decolonization process to outer space, but also to sport, movies, art and, not least, pop music.

Ultimately, the Cold War which followed the second global conflict ended in a "draw", a long-term equilibrium, which lasted until one of the two contenders collapsed, largely (even if not solely) for its intrinsic economic weakness. To a certain extent, it's even legitimate to say that both opponents needed also their own foe, largely for reasons of internal political cohesion.

The ongoing one between US and China is, again, a "cold" confrontation; notwithstanding the technological progress in the production of nuclear armaments, a non-conventional war between superpowers luckily remains in the realm of impossibility – particularly for two countries which aim to achieve a role of leadership in World politics. As happened before, this new Cold War clearly aims at controlling territories and "spaces of power", with the purpose of "containing" and limiting the reach and capabilities of the opponent. Both physical spaces, mainly through the use of soft power and technology, but also once again fiercely ideological.

Of course, this is no longer a confrontation between capitalist liberal democracies and socialist universalism. The struggle is between two opposite recipes for welfare and development, one based on democracy and liberal values, and another, which sees in autocratic rule the best way to manage the immense challenges that the future deserves to all mankind. The one-man rule which Mr. Xi is imposing to China is clearly pointing in the direction of minimizing the cost of internal debates when the country is struggling to re-gain a centrality in the World scenario lost almost two centuries ago, when the first Opium War started China's long "century of humiliation".

So, what makes this confrontation a "real" Cold War, albeit unique? This may be better understood not looking at its dynamics of confrontation, but at what makes this confrontation permanent. The US–URSS Cold War became an enduring conflict once it reached a stalemate in the realm of geopolitics. This stalemate was caused both by the nuclear deterrent and by an equilibrium which was reached first and foremost in Europe, symbolically with its definitive partition with the construction of the Berlin Wall. The present shows a fundamental difference: it is taking place in a truly globalized economic space. Both the incumbent and the challenger are today inextricably linked by a dense web of economic ties, built in the course of the last four decades. Notwithstanding the (mainly Western) steps in this direction, "to decouple" would, at present, involve an enormous effort, time and political willingness. This, of course, would be relatively easy in some cases and in some specific industries (for instance, those mainly related to the military, or to strategic activities, where the clash between the two powers is now mostly fierce), but almost impossible, even in the medium and long-run, in others, in which thick value chains linking the two economies cannot be quickly rescinded without dramatically damaging large sections of the two countries' economies.

In other words, the uniqueness of the present confrontation between the US and China is that notwithstanding radical ideological differences and geopolitical frictions (mainly in the Pacific and over Taiwan), a long-term equilibrium is still likely going to take place in the economic sphere, before than in the realm of geopolitics, as happened in the case of US–URSS.

Not by chance, in Bali both the leaders agreed on cooperative efforts in the areas of pandemics, politics to address climate change, and economic perturbations – basically all the potential obstacles to the smooth functioning of the global economy – the best demonstration that a geo-economic (more than geo-political) equilibrium under the form of a mutual dependence is a dominant constraint, for the sake of reciprocal convenience (if not respect).