A new Cold War with China?

The recent slapping of tariffs by US President Bident on a host of Chinese renewables has increased concerns of a new “Cold War”. The following is excerpted from a statement by Joseph S. Nye Jr, Prof Emeretus, Harvard University, in a Brookings Institute debate. “The great power competition between the US and China is a defining feature of the first half of the 21st century, but there is little agreement on how it should be characterised. If “Cold War” means intense prolonged competition, then they are in one, but if the term is used as a historical metaphor for the past, then we are not (yet), and should avoid it.
Analogies to the historical Cold War can mislead us about the real challenges faced from China. The US and the Soviet Union had a high level of global military interdependence, but virtually no economic or social interdependence. Moreover, ecological interdependence such as climate change was not yet an issue. The China challenge today is quite different.
The US cannot decouple its economy completely from China without enormous economic costs to itself, its allies, and third countries. US does over half a trillion dollars in trade annually with China, and China has learned to harness the creativity of markets to authoritarian Communist Party control in ways the Soviets never mastered. The US and its allies aren’t threatened by the export of communism, but by a system of economic and political interdependence that both the US and China can manipulate. Partial decoupling or “de-risking” on security issues is necessary, but total economic decoupling would be very costly, and few US allies would follow suit. More countries count China than the United States as their leading trade partner.
The ecological aspects of interdependence, such as climate change and pandemics, obey the laws of physics and biology, which make decoupling impossible. No country can solve these transnational problems alone. Global interdependence requires using power with others, as well as over others. The US is locked in a “cooperative rivalry” with China, in which it needs a strategy that can accomplish two contradictory things at the same time. This is not like Cold War containment. Meeting the China challenge will require a more complex strategy that leverages the alliances and rules-based system the US created. Its allies and partners, like India, are assets that China lacks. While the centre of economic gravity has shifted from Europe to Asia over the past century, Asia includes India, which is a Chinese rival, not an ally. Moreover, the combined wealth of the Western democratic allies will far exceed that of China (plus Russia) well into this century.
If strategic success is defined as transforming China in a way similar to the collapse of the Soviet regime at the end of the Cold War, the US is likely to fail. Although the Communist Party fears Western liberalization, China is too big to be invaded or coerced into domestic change, and the reciprocal is true. In that sense, neither China nor the US poses an existential threat to each other, unless they blunder into a major war. We should expect low intensity and economic conflict, but the US strategic objectives should be to avoid escalation and to preserve the alliances and institutions that will continue our role as the leading (though not hegemonic) country in the future.
Are these strategic objectives feasible, given the growth of Chinese power? Yes, because the US has major geopolitical advantages, and China is unlikely to displace it as a leading power. Geographically, the US is bordered by two oceans and friendly neighbours, while China has territorial disputes with neighbours. A second advantage is energy: the shale oil and gas revolution has transformed the US from an importer to an exporter. China, on the other hand, is highly dependent on energy imports passing through the Persian Gulf and the Indian Ocean, where the United States has naval supremacy. The United States also has a demographic advantage with a workforce that is likely to grow over the next decade, while China’s will shrink.
And while China excels in some subfields, America remains at the forefront in the key technologies of biotechnology, nanotechnology, and information technology.