Is this the new Cold War?

An analysis of the Sino-American relationship and its International impact.

Clara Cempini

The Pepole’s Republic of China (PRC) was born in 1949. Several events worsened the U.S.-China relations, starting from the Korean war breakout, the first Taiwan strait crisis and the Tibetan uprising, during which the U.S. government joined the UN condemning Beijing for human rights abuses in Tibet. However, after the Sino-soviet border conflict in 1960, China’s rapprochement with the US turned into a concrete scenario.
Indeed, in 1971 two particular events characterized the warming of the relations between the two countries: the secret trip to China of US Secretary of State Henry Kissinger and the recognition of the People’s Republic of China by the UN, endowing it with the permanent Security Council seat that the Chiang Kai-shek’s Republic of China had held on Taiwan since 1945. Despite Nixon’s visit to China and Carter’s full diplomatic recognition of China, Reagan’s arrival and the Tiananmen Square Massacre – along with the 1999 NATO explosive mistake -destroyed what was previously built. Nevertheless, Clinton’s U.S.-China Relations Act of 2000 laid the foundations for normal economic ties. In 2007, China announced an increase in defense spending, a decision that was criticized by U.S. Vice President. Moreover, in 2010 Beijing became the second-largest economy in the world. To continue, Xi Jinping’s leadership began in 2012, followed by the “shirt-sleeves summit” in California and the 2015 pledge to reduce carbon emissions.
The Trump administration’s declaration of sweeping tariffs on China’s imports and the consequent Chinese retaliatory measures triggered the so-called “trade war” between the two superpowers.
In 2019, tariffs were risen to 25% and President Trump gave his support to Hong Kong protesters. Although in 2020 the first economical breakthrough was reached, the COVID-19 pandemic and its consequences deteriorate Sino-American diplomatic relations.
Drawing a line between before and after the outbreak of the Ukraine War, various events must be highlighted to shape the U.S.-China current political climate. In 2021, for the first time there has been NATO’s clear statement considering PRC as an international security challenge: “China’s stated ambitions and assertive behaviour present systemic challenges to the rules-based international order and to areas relevant to Alliance security […] China is rapidly expanding its nuclear arsenal…”[1]
During the same year, the first virtual meeting between the two Presidents took place, and the importance of the two countries’ pacific co-existence was underscored. On the one hand, Biden highlighted his concerns about Xinjiang, Tibet, and Hong Kong’s situations and his commitment “to protect American workers and industries from the PRC’s unfair trade and economic practices”[2]. On the other hand, China’s leader underlined Beijing’s pledge to “peace, development, equity, justice, democracy, and freedom, which are common values of humanity”[3] and hoping for avoiding concrete practices to seek a new Cold War. However, during the 8979th Security Council’s meeting, China abstained from voting for the S/2022/155 resolution that condemned the Russian aggression on Ukraine, claiming that “All actions should be truly conducive to defusing the crisis rather than adding fuel to the fire”[4]. As the two major powers in the world, China and U.S. decisions have a great impact on the whole International Society. Indeed, PRC’s further decision may freeze either its relations with the west side or its ties with the Russian Federation. U.S. president was crystal clear outlining the consequences Beijing would provoke by helping the Russian invasion. In fact, during his Asian tour, Biden was firm declaring U.S. military support in case of a Chinese invasion of Taiwan. There is a clear link between Russia’s aggression on Ukraine and China’s approach to Taiwan, and all the measures carried out by the U.S. administration are not only directed against Putin’s actions, but also a straightforward message to shape Xi Jinping’s decisions. After the intensification of the Taiwan Strait tensions, a period of détente was reached after the G20 summit in Bali, officially interrupted after the shooting down of an apparent Chinese spy balloon. To sum up, the current political climate is constantly freezing, sporadically lighted by few “official” rapprochements. US administration continues to impose Clinton’s democratic enlargement approach, while China takes advantage of her middle role without biting off more than it can chew.  
From an economic point of view, the two countries are strongly tied to one another, especially from the Chinese entrance into the World Trade Organization in 2001. According to the 2021 Oxford Economics report, the Sino-American trade relations’ peak was reached in 2017 “with the share of US goods exports going to China reaching 8.6%, and the share of goods imports reaching 21.6%.” However, this record was broken during the last year with $153,837.1 billion in exports and $536,754.1 in imports (United States Census Bureau data). Regarding FDI, the U.S. investments made in China in 2021 were valued at $118.19 billion, achieving the highest quote since their trade relationship was established. Instead, FDI outflows from China in the U.S. increased dramatically from 2015 ($14.71 billion) to 2016 ($31.87 billion), attaining their greatest amount in 2019 with $38.79 billion invested (“Statista” data). A recent research article analyzed how political tensions may harm trade ties, focusing on the U.S.-China economic relationship. However, only the tariff percentages rate was strongly connected to political tensions, especially for industries with high levels of Global Value Chain (GVC) linkages to China: “while a standard deviation shock to political tensions leads to an increase in tariffs of about 0.05 per cent […] for industries with high levels of backward GVC linkages to China […] a similar shock only leads tariffs to increase by about 0.01 per cent for those with medium or low levels of back- ward GVC linkages to China”[5]. Despite 2019 economic tensions, on January 15 2020 the Phase One Tree Deal was signed solving the historical intellectual property fight between the two countries. Nonetheless, recent United States Trade Representative investigations have demonstrated Chinese non-commitment to respecting the agreement: “A recent study by OECD and EUIPO found that China, India, Philippines, Vietnam, Indonesia, and Pakistan are the leading sources of counterfeit medicines distributed globally…”[6]. To conclude, despite several ups and downs, U.S.-China economic tensions haven’t impeded their ongoing trade relationship from succeeding, reaching the highest trends in the last four years.  
As concerns the diplomatic situation, several struggles have been shaping the two countries’ relations for years. For instance, the 2022 Olympics diplomatic boycott imposed by the U.S. administration aimed to symbolically attack China for its human rights abuses and atrocities in Xinjiang. Also, the strong figurative correlation between the Ukraine war and the Taiwan Strait Crisis management has complicated the decisions, positions and connections between the two superpowers. Changing the paragraph’s tone, various efforts have been made to improve these countries’ relations. In November 2021 the two signed a joint statement during the UN climate summit in Glasgow increasing their cooperation to tackle the climate crisis, focusing on the Paris Agreement goals and pursuing diverse other actions: “Policies, measures, and technologies to decarbonize industry and power, including through circular economy, energy storage and grid reliability, CCUS, and green hydrogen; Increased deployment of renewable energy; Green, low-carbon transportation…”[7]. Another step to enhance the U.S.-China relationship was the Biden-Xi Jinping meeting in Bali. without solving major struggles, this event may have established the threshold to avoid Sino-American competition shifting into a conflict. After the balloon incident and the U.S. Secretary of State’s visit to China cancellation, the first warming attempt was the Blinken and Wang Yi confrontation. Despite this, the diplomatic climate between the two countries continues to be unstable and Chinese future decisions regarding the Ukraine war and Taiwan may affect its bilateral diplomatic relations with the United States.
According to the 2022 NSS, PRC is considered as passing strategic challenge given the government’s authoritarian nature: “Many non-democracies join the world’s democracies in forswearing these behaviors. Unfortunately, Russia and the People’s Republic of China (PRC) do not”[8]. Since the first Taiwan strait crisis in 1954, this matter has constantly been a sore point for U.S.-China relations. After speaker Pelosi arrived in Taipei, the Chinese Ministry of National Defense announced the launch of a series of targeted military operations as countermeasures. At the same time, Chinese media reported a series of PLA’s military exercises around Taiwan. According to CSIS, these operations intended to break down Tsai Ing-wen’s consensus, to send a straightforward signal to both the U.S and the international community, highlighting Chinese intention to keep its control over Taiwan, changing the original status quo. In addition, military exercises are interpreted as strategic methods to create ambiguity and uncertainty. On August 10, the PRC government published a white paper called “The Taiwan Question and China’s Reunification in the New Era” confirming China’s commitment to peaceful reunification. However, Biden’s reaction was firmly against Taiwan’s occupation. Indeed, for the first time since diplomatic relations with Taiwan were established, the U.S. president declared his support for Taiwan’s independence if not unilaterally declared. The latest security challenge which has been undermining the already difficult Sino-American relations is the “spy balloon” case. The American decision to shoot down the Chinese airship underlines U.S. non-tolerance toward a possible violation of its territorial integrity. On the contrary, China’s government had first tried to identify the balloon as a: “civilian airship used for research, mainly meteorological, purposes”[9]. Secondly, it tried to accuse the U.S. administration of “purely malicious hype and political manipulation”[10]. The II Cold War scenario seems to be a future possible threat to international security. Consequently, the diplomatic split into two sides and the economic decoupling will provoke enormous damage to the whole World. We already suffered from supply chain shocks, but Taiwan has a crucial position for the entire international community because of its semi-monopoly on semiconductor production. Its blockade would cause an irremediable loss to the production of a great series of goods.  
Pacific co-existence between the two superpowers is thereby the key element to avoid both international security and economic crisis. China-U.S. “way of life” may never coincide due to historical, political, and ideological matters; hence, the realistic theory will conduct to a mutual acceptance of existence, recognizing that “healthy” competition in some sectors (economically speaking) and good collaboration in other relevant aspects (such as the climate change issue) will keep their role as the two major superpowers and give benefits not only to their counties but also to the whole international community. Diplomatically speaking, “compromise” is one of the most relevant words, and it supposes that none of the parties involved will be completely satisfied.


[1] Brussels Summit Communiqué, 14 June 2021, North Atlantic Council.
[2] The White House Readout of President Biden’s Virtual Meeting with President Xi Jinping of the People’s Republic of China, November 16, 2021.
[3] Ministry of Foreign Affairs, the People’s Republic of China.
[4] Mr. Zhang Jun, Security Council, Seventy-seventh year 8979th meeting Friday, 25 February 2022, 5 p.m. New York (pg. 11-12).
[5] Bilateral Tensions, the Trade War, and U.S.–China Trade Relations, Ka Zeng, Rob Wells, Jingping Gu and Austin Wilkins, 2022.
[6] 2022 Special 301 Report, Office of the United States Trade Representative
[7] U.S.-China Joint Statement Addressing the Climate Crisis, Office of the Spokeperson, APRIL 17, 2021.
[8] National Security Strategy, October 2022, The White House.
[9] Foreign Ministry Spokesperson’s Remarks on the Unintended Entry of a Chinese Unmanned Airship into US Airspace Due to Force Majeure, 2023-02-03 21:32
[10] China blasts US over response to Chinese balloon incursion, February 16, 2023, AP News

FILE PHOTO: Chinese staffers adjust U.S. and Chinese flags before the opening session of trade negotiations between U.S. and Chinese trade representatives at the Diaoyutai State Guesthouse in Beijing, Thursday, Feb. 14, 2019. Mark Schiefelbein/Pool via REUTERS/File Photo