Thayer Consultancy Background Briefing:

ABN # 65 648 097 123

A New Cold War in the Indo-
Pacific Region?
Carlyle A. Thayer
November 27, 2018

We request your assessment of the following two issues:

Q1. Will a new Cold War between the USA and China break out in the near future?
ANSWER: At present there is an on-going debate in the United States, Australia and
Europe about whether or not to describe rising tensions between China and the
United States as a “new Cold War.” The debate hinges on how to define what is
meant by a Cold War and the usefulness of analysing current developments through
the prism of historical analogy.
There are two broad definitions of the Cold War. The first is an historical definition.
According to this definition, the Cold War was a prolonged conflict between the
Soviet Union and the so-called Free World (United States, Western Europe) starting
from the breakdown of the anti-fascist alliance after the Second World War (1946-
47) to the early 1990s. The Cold War did not involve armed conflict between the
Soviet Union and the West but it witnessed a series of crises such as the Korean
conflict (1950-53), access to Berlin (1959 and 1961) and the Cuban missile crisis
(1962) and an arms race involving nuclear weapons. The essence of the historical
Cold War was an intense global political, ideological and military rivalry between the
Warsaw Pact countries and those belonging to the North Atlantic Treaty
Organisation (NATO).
The second definition of Cold War is an analytical one to describe rivalry between
the communist/socialist and capitalist systems that was characterized by intense
global competition and confrontation without reference to a specific historical
period. Sometimes, analysts used the term Second Cold War to refer to rivalry
between the two blocs after the breakdown of détente in the 1970s.
Generally, it is argued that the historical Cold War and the analytical Cold War came
to an end during the period from 1985 to 1989. In December 1990, the Organization
for Security and Cooperation in Europe (OSCE) declared the Cold War was officially
over.
To turn to recent events: some analysts argue that the speech by U.S. Vice President
Mike Pence on 4th October this year on U.S. China policy signalled the
commencement of a new Cold War. One writer, Walter Russell Mead, noting the
intense political controversy in Washington, D.C. over the nomination of Brett
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Kavanaugh to the Supreme Court at the same time as Pence’s speech, asked, “Did
Cold War II break out… while no one was watching?”
Can current tensions and rivalry between China and the United States be likened to a
new Cold War?
If the answer is “yes” the term new Cold War can only be applied in its most general
sense. There are major differences between the contemporary period and the past.
First, there are no unified competing power blocs today. China has no allies and
Trump consistently denigrates the role of U.S. defence treaties. The axis of rivalry
and competition revolves around relations between China and the United States.
Second, the intensity of the ideological element is almost wholly lacking. It is
arguable whether China’s seeks to impose its political-economic model of
development on the rest of the world.
Third, China and the United States are economically inter-dependent. The current
Trump trade war is designed to redress China’s huge trade surplus and theft of
intellectual property (and other issues such as commercial hacking). The Trump
Administration is not trying to sever economic ties with China so much as to readjust
them.
Fourth, despite rising tensions, China and the United States continue to engage each
other at head of government and other levels to deal with economic issues and non-
proliferation on the Korean peninsula. Rather than try to contain China, the United
States presently hosts 360,000 Chinese university students.
The United States National Security Strategy clearly identifies China as a revisionist
power and peer competitor. But does the October 2018 speech by Mike Pence
amount to a modern day version of the Truman Doctrine?
In a speech to Congress in May 1947 President Truman declared, “It must be the
policy of the United States to support free peoples who are resisting subjugation by
armed minorities or by outside pressures.” No such ringing affirmation was made by
Pence. He declared: “our message to China’s rulers is this: This President will not
back down – and the American people will not be swayed. We will continue to stand
strong for our security and our economy, even as we hope for improved relations
with Beijing.” Pence’s speech was all about America not allies and strategic partners.
As for the Indo-Pacific Region, Pence offered new bilateral trade agreements and a
streamlining of international development and finance programs to give “foreign
nations a just and transparent alternative to China’s debt-trap diplomacy.” A month
later Pence spoke at the APEC summit in Port Moresby and said, “Today, it’s also my
privilege to announce our new Indo-Pacific Transparency Initiative. In conjunction
with more than $400 million in American funding, this program will help empower
the region’s citizens, combat corruption, and strengthen sovereignty. And it is our
honor to initiate this program.” In 1947, President Truman asked Congress for $400
million (or US $4.6 billion in today’s currency) to support the Greek government from
communist insurgents.
To round off this discussion, in both of his speeches Vice President Pence quoted
President Donald Trump expressing the view that China and the United States could
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manage their differences and work constructively together. In his address to the
APEC summit Pence stated:
And let me be clear again: China has an honored place in our vision of a free
and open Indo-Pacific if it chooses to respect its neighbors’ sovereignty;
embrace free, fair, and reciprocal trade; uphold human rights and
freedom. The American people want nothing more; the Chinese people and
the entire Indo-Pacific deserve nothing less.
In sum, the term “new Cold War” draws our attention to increased rivalry and
competition between China and the United States. But the current relationship
between these two countries is entirely different from the earlier historical Cold War
between East and West. The term “new Cold War” must be highly qualified if used as
an analytical tool to explain the current power dynamics between China and the
United States.
Q2. What should Vietnam do if a new Cold War breaks out?
ANSWER: In the historical Cold War period from 1947-89 newly independent
countries came under pressure to take sides. Essentially they had three choices:
alignment, non-lignment or neutrality. Today the power dynamics between China
and the United States are fluid. There is no U.S. policy of containment or “roll back”.
Formerly newly independent countries are now established states.
The international system is more diverse and complex than during the historic Cold
War period. Vietnam should continue to pursue its present policies of
“diversification and multilateralizaton” (đa dạng hóa và đa phương hóa) and
“cooperation and struggle” (vừa hợp tác, vừa đấu tranh) in its relations with China
and the United States. Vietnam must maintain its independence and self-reliance
(độc lập và tự lực) by maintaining national unity against external interference in its
internal affairs whether by China or the United States. Vietnam must continue to
build up, modernize and network its capacity for national defense of its sovereignty
and territorial integrity. Finally, Vietnam also should work to reinforce the unity and
centrality of the Association of Southeast Asian Nations.

Suggested citation: Carlyle A. Thayer, “A New Cold War in the Indo-Pacific Region?,”
Thayer Consultancy Background Brief, November 27, 2018. All background briefs are
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.