Niall Ferguson and Condoleezza Rice on the new cold war

The intensifying rivalry between America and China has led to much talk of a new cold war. Some say that is going too far, but the two do seem now to have little space for co-operation and rather more for conflict.

The greatest difference with the first cold war is, of course, the origin of this rivalry. After the second world war, the two superpowers settled quickly into confrontation. They had little in common. The Soviet Union was a military giant but an economic recluse. China, conversely, was brought into the international economy after 1978. For 30 years it benefited from integration and access to foreign capital and know-how. Along the way, it acquired an aptitude for indigenous innovation, not just intellectual-property theft.

And China had been chipping away at American power for years. But it took the more direct approach of Xi Jinping, who speaks of surpassing America in frontier technologies and refers to the Taiwan Strait as Chinese national waters, to shock America into understanding the challenge ahead.

China has built an impressive global network of telecoms infrastructure, port access and military bases (or rights to build them) in client states. Chinese influence has steadily evolved from pure mercantilism to a desire for political influence. America has been slow to react. Too often it resorts to cajoling of other countries to resist Chinese investment, while offering few alternatives.

The truth is, though, that China’s foreign-investment strategy is beginning to show cracks. Its “loan-to-own” approach, its reliance on Chinese rather than local workers and its infrastructure construction failures are arousing resentment.

In the cold war and after, the Marshall Plan, the Peace Corps, the American-backed “green revolution” in Indian agriculture and the pepfar initiative to tackle hiv/aids showed that America could improve the lives of people abroad. The question today is how far it can take advantage of Chinese missteps with an equally effective strategy.

From the 1940s to the 1980s the Hoover Institution, where we are both fellows, fostered the study of the cold war. Its archives remain crucial to scholars of the period. We would do well to understand it and to take its lessons to heart. Five stand out.

The first is that allies matter. China has clients that are beholden to it in one way or another. Russia, the most important, has become a liability because of Vladimir Putin’s war on Ukraine. America, meanwhile, is blessed with a European alliance revitalised by its firm response to Russia’s aggression, a stronger nato and close allies in Asia.

Second, deterrence requires military capability to match rhetoric. China has been improving every aspect of its military capability, just as the war in Ukraine and wargaming about Taiwan have revealed weaknesses in the West’s. The West must respond by procuring more advanced weaponry, developing secure supply chains for critical materials and components, and rebuilding the defence-industrial base. Peace through strength really works.

Third, we need to engage in efforts to avoid accidental war. To this day we benefit from contacts between the American and Russian armed forces (established during the cold war) to prevent an accident between them.

Fourth, remember George Kennan, the American diplomat based in Moscow who wrote the “long telegram” in 1946, predicting that the Soviet Union’s own internal contradictions would eventually weaken it. China is economically stronger than the Soviet Union but has many of its own contradictions: a deflating property sector, high youth unemployment and disastrous demography.

The final lesson of the first cold war is that nothing is inevitable. Success today will require democracies to come to terms with their own flaws and contradictions—not least, the fractures in society amplified in online echo-chambers. Failure to safeguard the legitimacy of institutions that protect freedom has led to plummeting confidence in democracy itself.

Yet democracies have been counted out before by authoritarians who mistook the cacophony of freedom for weakness and assumed that the suppression of dissenting voices in their own societies was a sign of strength. The best cold-war leaders understood that the authoritarians were wrong. If this generation of leaders can show similar resolve, the outcome of this new superpower rivalry—whether it is a second cold war or something new—should be another victory for the free world. ■

Niall Ferguson and Condoleezza Rice, Stanford’s Hoover Institution