Washington’s ‘Yellow Peril’ is pushing the US into a cold war with China

Fundamental civilisational tensions between the US and China could persist well into the future, says Singapore Summit chairman Ho Kwon Ping
And one possible outcome is the bifurcation of the digital world, resulting in a severe setback for globalisation

Ho Kwon Ping

Published: 6:00pm, 21 Sep 2019

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Last year, I spoke about the gathering storm clouds of a possible civilisational conflict between an ageing Pax Americana challenged by a rising Pax Sinica. Today, we can be relieved that the proverbial thunderstorm has not yet burst forth.

However, the prospect we face instead is the grey, chilling and unceasing drizzle of a protracted cold war. This second “cold war” may persist well into the next decade, even after today’s human protagonists have departed the scene. Fundamental civilisational tensions may go deeper than whoever is currently or will be the occupant of the White House or Zhongnanhai.

There is no playbook for managing this conflict should it worsen. The last cold war was largely a security issue and other historical parallels going further back have not ended well for all sides. If anything, the recent resurgence of ultranationalist, right-wing politics in virtually all the major nations of the last world war, signals only greater frictions ahead.

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De-globalisation, particularly in the diminishment of international trade, investment, cross-border people movements, and the role of multilateral institutions and agreements, will only fuel this dangerous trend.

Business confidence is fading fast, even as global manufacturing has contracted and the services sector is expected to follow suit. Interest rates have little room for further cuts and the infamous bond yield curve has turned negative – historically a precursor of recession. The erosion of global economic sentiment since last year has been quite dramatic, and no one can possibly forecast today where we will be the same time next year.

Four broad trends may become more apparent in future months. First, we may face a protracted, multidimensional cold war, not just a trade nor even economic conflict. Across-the-board containment of China in every facet of human or societal behaviour has become the organising principle for the United States, with increasing weaponisation of all instruments available in its economic, security, technological and foreign policy arsenal.

Previous advocates of the so-called Washington consensus on convergence – that as China gets richer and more powerful, it will become more “like us” – are busily repudiating their past positions. Anti-China is not only the single issue on which Democrats and Republicans agree, it is also the only issue

on which they are out-competing each other to be the bigger and badder China-basher.

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When a senior American foreign policy planner recently proclaimed that the US was facing an unprecedented challenge because the potential conflict involved “a non-Caucasian” civilisation, no one raised an eyebrow. It was a clear signal that the Yellow Peril has returned to Washington.

This has not gone unnoticed in Beijing by the proponents of a Make-China-Great-Again ideology, which proclaims that China’s hundred years of humiliation should end now. Whether the issue is Huawei or Hong Kong, Chinese leaders can afford to play the long game, and will. China’s ascension can be delayed but impossible to prevent; China is certainly not a pre-collapse Soviet Union playing a few desperate last cards and it would be a disastrous mistake to equate the two.

US President Donald Trump and Chinese President Xi Jinping. Photo: AP

Second, as America’s influence in Asia continues to wane, Asian nations urgently need to find agreement on their highly emotive, divisive and deep-rooted conflicts, which go back decades and remain unresolved. These issues from World War II and even before continue to overshadow and endanger relations between Japan and Korea, Japan and China, China and Taiwan, and between the two Koreas.

When the US nuclear umbrella protected Japan from rearming, and Captain America forcefully mediated between Japan and Korea, or Japan and China, simmering issues could be papered over. In the dangerous void left by a gradually withdrawing America, these tensions can rapidly escalate into potentially dangerous conflicts. The depth of bitterness and speed of escalation in Japan-South Korea relations in recent months is a case in point. North East Asia needs to create a new framework for cooperation as American hegemony over the area gradually diminishes.

China has consistently objected to America’s de facto role as judge, jury and executor of the so-called rules-based international system after WWII

Third, nations are increasingly pressured to take sides as a US-China cold war polarises issues. Hopefully this will stiffen rather than undermine the resolve of the Association of Southeast Asian Nations to remain proactively neutral and to speak truth to power rather than succumb to a divide-and-rule strategy by either the US or China.

The South China Sea issue is a good example. China has consistently objected to America’s de facto role as judge, jury and executor of the so-called rules-based international system after WWII. Most grating in the Chinese view is the fact that the US effectively governs the rules of engagement in what China considers its own backyard – the unequal parallel being that the US considers the Gulf of Mexico or Caribbean Sea to be off-limits to any other superpower to exert any influence.

Explained: South China Sea dispute

To demonstrate that the South China Sea is indeed its backyard – an euphemism for sphere of influence – China has proposed a code of conduct for regional states to agree and adhere to. An agreement, which is being finalised, should hopefully reduce tensions between China and other claimant nations. Extremely glaring is the intentional exclusion of the US from the negotiations.

If the US rejects this code of conduct and aggressively challenges Chinese dominance over these waters, an eventual skirmish is not at all impossible as naval stand-offs become increasingly belligerent. Asean nations will then find it very difficult to remain neutral against conflicting Chinese and US pressure. This is when Asean solidarity and neutrality will be put to the test.

Fourth, whilst previous cold – or for that matter, hot – wars have seen a bifurcation of the physical world into geographic blocs, the new cold war may see a bifurcation of the digital or virtual world, and that will have enormous ramifications. The ideal digital world consists of a seamlessly connected global platform with universally accepted operating systems, shared hardware and software standards, and interconnected regulatory protocols. This is good for business and for economically efficient global connectivity. It was also the norm until the American ban on Huawei came along.

China saw the unprecedented, concerted attack on Huawei as a first step of an aggressive blockade of Chinese firms from Western leading edge technologies such as robotics and artificial intelligence. This would lead to a broader, strategic decoupling between China and the US. Indeed, this seems to be the new Washington consensus.

As tensions rise, how China and the US can avoid going to war

Should this happen, China will not be unduly panicked. After all, China has already intentionally decoupled much of its digital universe, with, for example, WeChat and Weibo completely replacing say, WhatsApp and Facebook. Whilst a more extensive digital decoupling may delay China’s advance into the rest of the global market, it is probably the only country with both the market size and indigenous technologies to create its own ring-fenced digital world of operating standards, systems and platforms. And from there, to overseas neutral marketplaces.

For the rest of the world however, the economic and technological inefficiency of bifurcated digital platforms will not only be extremely costly, but also represent a severe setback for globalisation.

Ho Kwon Ping is the founder and executive chairman of Banyan Tree Holdings. He is also the chairman of the Singapore Summit and this is an excerpt of his speech delivered at the conference on September 21, 2019.

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