The term ‘cold war’ is again being thrown around as analysts, politicians and anxious businesspersons try to understand the brangling between the US and China, with each closing the other’s consulates. That is a practice that is unusual, even between combatants like India and Pakistan. Alongside, news channels were reporting a ‘rare’ dual exercise by two US carrier strike groups in the South China Sea in mid-July, with some 120 aircraft and 12,000 military personnel deployed. The public noise seems to indicate that the US is ready to substantially increase pressure and risk escalation, at a time when China is being viewed negatively by almost every country. All of this should, on the surface, make it easier for India to manage its way out of the Ladakh flare-up. But the Chinese are showing themselves slow to disengage, serving to underline that things are never quite what they seem in international politics.
Although US officials have made statements aplenty condemning Chinese incursions across the Line of Actual Control, this doesn’t seem to have affected Beijing’s actions overmuch. A careful analysis of Donald Trump’s recent policies vis-à-vis China reveals that the primary driver is strong self-interest in diverse areas, most of which have nothing at all to do with our core interests.
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Tit-for-tat diplomacy
The months immediately preceding the consulate issue witnessed a series of irritants. The most serious of these was the US signing Uighur Human Rights Policy Act of 2020 into law on 17 June. The stringent language called for intelligence reports on the issue, oversight on Chinese media, and State Department action. The bill was hugely welcomed across the US, including by media usually critical of President Trump.
Beijing warned of ‘consequences’ to the US, but crises seemed to be the norm. The expected Chinese imposition of new security legislation in Hong Kong followed, and thereafter, a series of retaliatory actions that included US sanctions on four Chinese officials including Chen Quanguo, the top Communist Party boss in Xinjiang, the first such move on a member of the Politburo. Beijing retaliated by targeting a tranche of US congressmen including Ted Cruz and Sam Brownback.
On 21 July, US prosecutors charged two Chinese hackers with widespread espionage spanning decades. The next day, the Chinese consulate in Houston was ordered to close, on the charge that it had been ‘for years’ the epicentre of economic and scientific espionage. China has six other missions, including one in San Francisco, which escaped closure despite sheltering a Chinese researcher with alleged links to the PLA. In retaliation, China chose to close down the Chengdu consulate, instead of the far more important ones at Guangzhou, Shenyang, or Shanghai. Another backstory to all this, was China barring embassy officials from picking up diplomatic pouches from the evacuated consulate at Wuhan earlier this year in a clear violation of diplomatic procedures. That seems to have got Secretary Mike Pompeo into a rage. His speech on 23 July is now known for the ‘distrust but verify’ strategy and declared failure of past US policy. He also used the speech to refer to President Xi Jinping as “General Secretary’, which seems to be a deliberately applied ‘facepalm’; all of this from a team administration that till mid-year was hailing that very President.
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Aid for a price
Now to the actuals. The US-China trade war that started in 2018, partially ended with a “Phase One” agreement that China would buy $200 billion worth of US goods to redress the trade imbalance. That figure always seemed unrealistic, and China never confirmed the amount, but the determination to increase exports of pork and corn from states important to Trump’s re-election was clearly at the forefront.
In late May, Premier Li Keqiang was promising to keep to the deal, even as the Senate passed a bill to ban many Chinese companies from being listed on US bourses. US trade statistics show that exports to China have been climbing steadily from January 2020 onwards, indicating that the trade deal is slowly picking up. Meanwhile, business continues. Indeed, just after the Houston consulate closure, Forbes reported that the Chinese Hansoh Pharmaceutical Company found itself richer by a few billion after it agreed to license a cancer drug to a US firm.
In the military arena, US aircraft carrier concentration in the South China Sea ended with the latest exercise, though the threat remains. The formidable USS Ronald Reagan is off the West Coast of Australia, while the USS Nimitz in the Philippines Sea. Other actions, however, make US military commitments questionable. In mid-July, the administration was threatening, yet again, to reduce US troops in South Korea, demanding that Seoul pay some 400 per cent more for US protection. This is also being shown as part of a global drawdown, including from Germany. None of this chimes well with the toughened posture on the South China Sea, when Secretary Pompeo explicitly rejected the maritime claims of China, and by backing the 2016 tribunal award, has now committed the US to put its warships where its mouth is, in protecting the claims of Philippines, Vietnam and Malaysia.
But in this, as the Indo-Pacific Strategy suggests, it expects Japan, India and Australia among others to weigh in, pointing out that the US has been ‘contributing $2 trillion in constant dollars since the end of World War II’ to the region. No free rides under this administration.
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Weapon is money
That the heavyweight China policy is linked to upcoming US elections and the need to divert headlines away from the Covid crisis is obvious, even without former NSA John Bolton’s allegations in his new book that Trump approved of internment camps in Xinjiang provided he got his trade deal. What is less noticeable is the self-interest evident in the May sanctions on 33 Chinese companies, most of whom focus on Artificial Intelligence and related technologies, an area earmarked by a Presidential Executive Order of February 2019, as being ‘key’ to US growth.
The Commerce Department naturally cited gross human rights violations as the reason for the sanctions. Similarly, ‘principled realism’ lies at the heart of the Approach to China plan, which coincidentally came out just as the Ladakh conflict broke out, and which calls out Chinese aggression. Whether this strategy encouraged Washington to assist India is unclear, but certainly, no advance warning was given of Chinese movement to the border or its intentions, as apparent from the near surprise achieved by Beijing in Galwan. Certainly, US officials, both serving and retired, have publicly called out Beijing’s use of force against India, likening it to its actions in the South China Sea. But no other form of pressure is readily evident. That Beijing also fails to see anything of the kind is apparent from its continuing presence in strength across Indian borders as brought out in careful reviews by the Takshashila Institution.
The lesson is this. A new Cold war is all very well for the purpose of analysis. But India has to consider a future hot war, where friends are few and far between, and where cash matters more than diplomacy. Likely weapons are tenders and trade deals, even while keeping your powder dry. In that latter task, the US defence industry will only be too happy to help.
The author is former director, National Security Council Secretariat. Views are personal. Views are personal.