Conflict between Great Powers is back with a Vengeance: the New Cold War between the US and China plus Russia

By Robert H. Wade - 18 July 2022
The New Cold War between the US and China plus Russia: ‘Geopolitics is back, but it’s in the economy’

China’s emergence as a powerful challenger to the US’s and the west’s well-crystallized position atop the global hierarchy poses the question of how to co-exist peacefully. This essay discusses several economic sectors where the two sides are acting aggressively towards each other; in trade, capital, high tech, and cyberwar. It argues that the geopolitical class of the US and the west must go against the drift of popular opinion and strengthen interaction and investment in the ‘battle ground’ states of the global South, while simultaneously sustaining a closer negotiating position with China and avoiding a self-fulfilling prophecy of war. It concludes with a discussion of appropriate western steps to peaceful co-existence, and the prospects for hot war.

Policy Recommendations

  • These are recommendations for western states.
  • Resist trends towards distinct blocs with their own ideologies, tech standards, cross-border payments systems, reserve currencies – not least because this would curb US and European access to the most populous and fastest growing region.

  • Shrink the degree of financialization of western economies to the point where finance becomes a service provider to the real economy.

  • Greatly increase aid to developing countries, especially for physical infrastructure.

  • Give up the gross over-representation of western states in international organizations like the IMF and World Bank.

  • Push forward with a US-China permanent secretariate staffed by professionals from both countries.



Image: Matteo X via Flickr (CC BY 2.0)