Thayer Consultancy Background Brief:

ABN # 65 648 097 123

U.S.-China Relations: A New
Cold War in the Indo-Pacific?
Carlyle A. Thayer
May 22, 2020

Given recent developments in the relationship between the U.S. and China, such as
those related to the COVID-19 pandemic, economic and trade tensions (Huawei and
ZTE ban, a bill targeting at Chinese companies' listing on the U.S. stock market), and
U.S. Navy ships in the South China Sea, we request your assessment of the following
issues”
Q1. What is your assessment of the current U.S.-China relationship? What are China’s
and the United States’ intentions and motivations behind these developments? Some
observers state that U.S.-China relations have become a new Cold War, do you agree?
ANSWER: Relations between the United States and China are at their lowest ebb since
Donald Trump was inaugurated president in January 2017. China’s trade surplus with
the United States was the key irritant and this resulted in a tariff war. However, with
agreement on a Phase 1 trade deal in January, relations improved. China agreed to
purchase an additional $US200 billion of American farm products and other goods and
services over two years, from a baseline of $186 billion in purchases in 2017.
The outbreak of the COVID-19 pandemic in the United States has seen President
Trump’s priorities of high employment and rising growth rates taken a precipitous
drop and thus threaten his re-election. Trump is frustrated by the pandemic because
he wants to reopen the United States as soon as possible and kick start economic
growth and lower unemployment. His public health officials, however, argue caution
lest things get worse.
Trump has decided as a matter of expediency to distract public attention from his
lacklustre handing of the COVID-19 pandemic by blaming China and the World Health
Organisation. Secretary of State Mike Pompeo has been the most proactive member
of the Trump Administration to criticize China, actually the Chinese Communist Party,
for withholding information on the outbreak of the coronavirus thus contributing to
the high death rate in the United States. Member of the U.S. Congress have been quick
to express anti-China sentiment. These developments have led American political
analysts to forecast that this will be a central theme in the run up to presidential
elections on 3 November.
China has responded with its own war of words and this has spilled over to the South
China Sea. China has ridiculed the U.S. for the spread of the coronavirus to the crew
on the USS Theodore Roosevelt aircraft carrier thus putting it out of action for two
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months. China’s propagandists, the Global Times in particular, argue that the recent
step up in U.S. Navy activities in the South China Sea are a sign of U.S. weakness.
The United States, for its part, has increased the tempo of freedom of navigation
operational patrols, including conducting back-to-back patrols, one in the Paracels and
the other in the Spratlys. In addition, when China sent the Hai Yang Dizhi 8 and escorts
into the waters off East Malaysia to harass oil exploration being carried out by
Petronas, the state oil company, the United States responded by dispatching the USS
America and USS Bunker Hill to conduct naval presence patrols. Then the U.S.
dispatched the USS Montgomery, USNS Cesar Chavez and the USS Gabrielle Giffords.
The U.S. has also dispatched naval warships through the Taiwan Straits, and
deployed B1-B bombers to Guam to fly "strategic deterrence missions" over the
South China Sea and East China Sea.
China is motivated to counter U.S. criticism and portray itself as key country and the
leader in cooperative global efforts to counter COVID-19. China is also motivated to
respond to foreign oil explorations activities in waters that it claims in the South
China Sea. Additionally, China does not want to be viewed as weak by regional
states.
The use of the term “Cold War” as a metaphor has many meanings. The most
appropriate one is that despite strong differences in strategic interests and tensions
between China and the United States it is unlikely that one or the other would resort
to armed force.
Q2. What aspects of U.S.-China rivalry impacts the most on Southeast Asia and
Vietnam in particular.
ANSWER: Both China and the United States will intensify pressure on regional states
in Southeast Asia to side with them as Beijing and Washington move to control the
World Health Organisation investigation into COVID-19. Regional states will also come
under pressure to support competing responses to COVID-19 by China and the United
States. In other words, regional states will come under pressure to take sides as
Washington and Beijing compete for influence.
Regional states also will come under U.S. pressure to support U.S. Navy operational
presence patrols in the South China Sea by hosting ship visits or taking part in U.S.
engagement activities or military exercises.
Vietnam as ASEAN Chair will face challenges reinforcing ASEAN centrality when
pressures from China and the United States are likely to exacerbate fissures among
ASEAN members.

Suggested citation: Carlyle A. Thayer, “U.S.-China Relations: A New Cold War in the
Indo-Pacific?” Thayer Consultancy Background Brief, May 22, 2020. All background
briefs are posted on Scribd.com (search for Thayer). To remove yourself from the
mailing list type, UNSUBSCRIBE in the Subject heading and hit the Reply key.
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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.