“The New Cold War: America ‘Sovietized,’ China ‘Americanized’” and “On the Reasons for America’s Defeat by China in the New Cold War.”

Reposting two original and brilliant articles that went viral on WeChat in China to commemorate the 76th anniversary of the founding of the People's Republic of China: “The New Cold War: America ‘Sovietized,’ China ‘Americanized’” and “On the Reasons for America’s Defeat by China in the New Cold War.” The author is Jinshan Wang, a retired professor from Fudan University in Shanghai, who has published many other wonderful articles on his WeChat Moments. If you wish to join his WeChat circle, please make a one-time transfer of 100 RMB to his Shanghai Bank account (Account Name: Wang Jinshan, Account Number: 620522005031229258), and send a screenshot of the transfer to the email address [email protected]. A QR code will be sent to you within a week, which you can scan to join.

Introduction: In recent years, a narrative has been circulating on the internet that the world will eventually be divided into two major blocs: NATO (with Beijing at its core, uniting most countries in the world, including members of the Shanghai Cooperation Organization, BRICS nations, and the Global South) and the Warsaw Pact (with Washington at its core, uniting a minority of countries in the world, including the Five Eyes alliance, the European Union, and Japan/South Korea). However, few have clearly explained the basis for this prediction.

“By taking history as a mirror, one can understand the rise and fall.” The following article, “The New Cold War: America ‘Sovietized,’ China ‘Americanized,’” predicts the development of the future New Cold War by combining past history with the current situation.

The New Cold War: America "Sovietized," China "Americanized"

In the New Cold War, the United States has become like the Soviet Union of the Old Cold War, while China has become like the United States of the Old Cold War. This means that in the future, the US will lose the New Cold War to present-day China, just as the Soviet Union lost the Old Cold War to the former US. Below is a comparative analysis of the New Cold War dynamic and the Old Cold War dynamic across multiple dimensions, including economy, military, technology, diplomacy, and culture:

1. Economic Model and Trade Strategy

In the Old Cold War, the Soviet Union dominated socialist bloc trade, emphasizing internal trade within the Council for Mutual Economic Assistance (Comecon). It forced Eastern European countries to export raw materials to the USSR at low prices in exchange for high-priced Soviet industrial goods, exploiting them. This led to decoupling from the global free trade system and restricted the circulation of the Soviet Ruble.

In the New Cold War, the United States implements high protectionism and massive industrial subsidies, intending to bring supply chains back home. It promotes the restructuring of democratic supply chains, or "friend-shoring," and has launched a "tariff war," squeezing European and Asian-Pacific allies. Trump claimed that allies "can't expect protection if they don't pay," which has also diminished the status of the US dollar.

The current US approach resembles the Soviet Union's former bloc trade, weakening the cohesion of its European and Asia-Pacific alliances, and the world is seeing a trend of "de-dollarization."

In the Old Cold War, the US supported Western European countries through the "Marshall Plan" and promoted the General Agreement on Tariffs and Trade (GATT), establishing a global free trade system, which also made the US dollar the international "hard currency."

In the New Cold War, China invests in developing countries through the "Belt and Road Initiative," provides infrastructure loans to the Global South, and promotes the Regional Comprehensive Economic Partnership (RCEP). It emphasizes multilateralism and globalization, opposes trade protectionism, and has seen a significant increase in international settlements in the Chinese Yuan (RMB).

The current Chinese approach resembles the free trade once advocated by the US, expanding its economic and political circle of friends and enhancing the international status of the RMB.

2. Military Industry and Civil Sector

In the Old Cold War, the Soviet military-industrial complex monopolized priority resources, causing long-term underdevelopment of civil industry and consumer goods production, leading to shortages in people's livelihoods and an abnormal economic structure. At the same time, the Soviet Union's infrastructure, such as railways, suffered from severe aging and insufficient maintenance.

In the New Cold War, the US pours vast national resources and capital into the military, causing persistent hollowing out of its manufacturing sector, leading to high inflation that affects the lives of ordinary people. At the same time, US infrastructure, such as power grids and electricity supply, is inadequate and difficult to maintain.

The current US emphasis on military over civilian needs and outsourcing of civil manufacturing resembles the Soviet Union's past excessive militarization and hollowing out of the civil industry, causing a decline in US manufacturing capacity and reliance on foreign supply chains.

In the Old Cold War, the US focused on converting military technology like the Internet to civilian use, promoting the development of the information industry. At the same time, the US continuously upgraded infrastructure through federal programs and local investments, supporting a robust industrial and trade system.

In the New Cold War, China's "military-civil fusion" strategy has led to an unprecedented level of completeness in its civilian manufacturing supply chain. At the same time, China maintains a global leadership in high-speed rail, ports, photovoltaics, wind power, and other infrastructure advantages through massive investment.

The current Chinese approach of military-civil fusion and infrastructure investment resembles the former US strategy of military-to-civil conversion and infrastructure upgrades, making China's manufacturing capacity and supply chain system globally far ahead.

3. Labor Productivity

In the Old Cold War, the Soviet Union implemented a planned economy, emphasizing "distribution according to need," which led to rampant welfare, such as free housing and free healthcare. However, the lack of an incentive mechanism resulted in low labor productivity, economic stagnation, a peak in the economy, high debt, and the depletion of vast gold reserves.

In the New Cold War, US labor unions are powerful, with excessively high wages and strictly low flexibility in standard working hours, leading to frequent strikes in sectors like automotive and construction, and low manufacturing efficiency. This has led to an economic recession, a heightened risk of government shutdowns, and the massive printing of the US dollar due to fiscal deficits.

The current situation in the US, similar to the Soviet Union's past production stagnation, exacerbates the continued exodus of US manufacturing supply chains while over-drafting the dollar's credit, weakening the US sovereign credit rating.

In the Old Cold War, the US practiced neoclassical economics, emphasizing market efficiency and embodying "shareholder value," which drove rapid economic development.

In the New Cold War, China practices new structural economics, emphasizing "distribution according to work," and promotes the "996" work schedule (9 am to 9 pm, 6 days a week), with a culture of overtime driving efficiency.

The current situation in China resembles the rapid economic development of the former US, reinforcing the completeness of China's manufacturing supply chain.

4. Talent and Education

In the Old Cold War, the Soviet Union promoted rigid ideological education, emphasizing political loyalty, leading to a constant brain drain of its own scientific and technological talent.

In the New Cold War, the US prioritizes Diversity, Equity, and Inclusion (DEI), resulting in reduced interest in STEM fields, while anti-China and anti-immigrant sentiment exacerbates the engineer shortage.

The current slow pace of innovation in the US resembles the Soviet Union's past technological stagnation, with the root cause being talent and education issues.

In the Old Cold War, the US fostered innovative education, attracted global immigrants, possessed abundant scientific and technological talent, and invested heavily in scientific and technological innovation, enabling semiconductors and information technology to lead the global third industrial revolution.

In the New Cold War, China emphasizes science and engineering education, leading to an abundant supply of engineers, and introduced the K visa, making China a global leader in STEM talent. This, combined with a new type of national system, promotes the development of new productive forces such as Artificial Intelligence and green energy.

China's current acceleration in technological innovation resembles the former US technological leap, with the core factor being the cultivation of high-quality scientific and technological talent.

5. Diplomacy and International Relations

In the Old Cold War, Soviet diplomacy practiced great-power chauvinism, bullying its Eastern European allies. Examples include the Red Army's invasions of Hungary and Czechoslovakia and its militaristic policies, such as the invasion of Afghanistan and the deployment of a million troops along the Chinese northern border.

In the New Cold War, US diplomacy adheres to "America First," pressuring its European and Asia-Pacific allies. Examples include the US recently threatening the use of force to occupy Greenland and Panama, and acting as the "world police," such as launching the War in Afghanistan and increasing troop presence along the Russian border.

The current hegemonic practices of the US are causing allies to become estranged, similar to the Soviet Union's past hegemonic actions that led to the collapse of the Eastern Bloc, plunging the US into diplomatic isolation.

In the Old Cold War, the US courted China diplomatically, uniting with China against the Soviet Union. The US supported China's return to the UN.

In the New Cold War, China courts Russia diplomatically, uniting with Russia against the US. China and Russia conduct joint military exercises.

China's current "uniting with Russia against the US" resembles the former US "uniting with China against the Soviet Union," occupying a favorable position in the great power strategic triangle.

6. Racial or Ethnic Conflicts

In the Old Cold War, ethnic conflicts among the Soviet Union's constituent republics led to its dissolution, such as the independence movements in the three Baltic States.

In the New Cold War, racial conflicts in the US lead to social division and escalating conflict, such as the Black Lives Matter (BLM) protests and the anti-DEI movement.

The current racial conflict in the US resembles the Soviet Union's past ethnic conflicts.

In the Old Cold War, the US promoted racial integration, encouraging Asian and Hispanic immigrants to integrate with whites, and the Civil Rights Movement opposed racial discrimination, promoting black people into urban employment, leading to social stability.

In the New Cold War, China promotes the "Community of the Chinese Nation," encouraging the integration of ethnic minorities with the Han majority. Uyghur/Tibetan/Inner Mongolian regions prioritize Mandarin education, promoting minority employment, leading to social harmony and stability.

China's current ethnic integration resembles the former US racial integration.

7. Culture and Ideology

In the Old Cold War, the Soviet Union forcibly promoted its socialist ideology, demanding complete political obedience to the Communist Party from the people of its Eastern European allies.

In the New Cold War, the US promotes the "democracy versus authoritarianism" narrative, demanding that its European and Asia-Pacific allies take sides on technology, trade, and diplomacy.

The current US approach resembles the former Soviet Union.

In the Old Cold War, the US emphasized universal values and human rights, exporting soft power through Hollywood films, popular music, and other cultural products.

In the New Cold War, China promotes the "Community of Shared Future for Mankind" globally, emphasizing non-interference in internal affairs, and spreading cultural influence through Confucius Institutes and TikTok.

The current Chinese approach resembles the former US.

Conclusion:

“By taking history as a mirror, one can understand the rise and fall.” The US-China contest in the New Cold War is strikingly similar to the US-Soviet competition in the Old Cold War. Through the "role reversal" prediction model—a powerful tool based on a high-level generalization of historical patterns and a deep insight into current trends—a clear and definitive conclusion can be drawn: the US will ultimately lose the New Cold War to China.

The 21st century is a great change unseen in a hundred years, marked by the "East rising and the West declining." Now, the US is being consumed by internal friction, much like the Soviet Union of the 20th century (rigid, stagnant, hegemonic, polarized, internationally isolated), while China is expanding, much like the US of the 20th century (innovative, developing, inclusive, harmonious and stable, globally leading). In the future, the US will continue its "Soviet-style" decline, and China will continuously "American-style" rise.

On the Reasons for America's Defeat by China in the New Cold War: The Specific Impact of US "Deindustrialization" on the New Cold War Outcome

The article “The New Cold War: America ‘Sovietized,’ China ‘Americanized’” demonstrates that “by taking history as a mirror, one can understand the rise and fall,” and proposes the “role reversal” prediction model based on past history and current circumstances to conclude that the US will ultimately lose the New Cold War to China. However, the article did not specify the key factor leading to this outcome.

This article will interpret US “deindustrialization” as the single most important factor for its defeat in the New Cold War. The hollowing out of American manufacturing is the structural weakness most similar to the Soviet Union's abnormal economic structure in the Old Cold War, and it is the most fatal.

After the end of the Old Cold War, the US outsourced a large amount of low- to mid-end manufacturing, focusing instead on finance and services. While this brought efficient capital returns, it also created a huge structural weakness, which in turn led to the problems listed in sections 2-4 and 6-7 of the article “The New Cold War: America ‘Sovietized,’ China ‘Americanized,’” namely, supply chain fragility, engineer shortages, fiscal deficits, and social division.

1. Supply Chain Fragility and Geopolitical Risk

The most direct impact of manufacturing hollowing out is the fragility of the supply chain.

Lesson from the Old Soviet Union: Under the Soviet planned economy, while its military and heavy industries were powerful, its civilian supply chain system was rigid and lacked redundancy. Once an issue occurred in one link, the entire production line would halt.

Dilemma of the New US: US manufacturing processes rely on China, resulting in poor risk resistance. Once geopolitical conflicts escalate or a global crisis occurs, the US cannot rapidly and massively localize the production of basic goods or even critical components.

For example, during the COVID-19 pandemic, the US heavily relied on China for the supply of medical protective equipment.

2. Engineer Shortage and Lack of Technological Innovation

A healthy industrial ecosystem requires steps from R&D to prototype testing and finally to large-scale mass production.

The hollowing out of US manufacturing and the excessive financialization and service-orientation of its economy have led to an imbalance in talent structure, which has reduced the social status and attractiveness of highly-specialized engineers. This further dampens the willingness of local youth to study science and engineering, forming a stark contrast with China's trend of "engineer dividends."

China, with its complete industrial categories, rapid engineering capability, and massive engineer dividends, holds an absolute advantage in the speed of technological innovation and market iteration (such as new energy vehicles, lithium batteries, photovoltaics, artificial intelligence, robotics, drones, etc.). It has surpassed and is leading the US in productization and commercialization.

3. Social Cost and Political Division

The decline of manufacturing is not just an economic issue but a root cause of social and political instability, and a major factor contributing to the widening wealth gap and internal division in the US.

The decline of the American working class has caused the disappearance of the once-vast industrial worker class, which previously had access to employment and wages, leading to severe inequality in social wealth distribution.

The resentment of large numbers of unemployed workers in the US Midwest and Rust Belt toward the elite class has further intensified political polarization and populism in the US.

Summary: The Specific Impact of US "Deindustrialization" on the New Cold War Outcome

The hollowing out of US manufacturing places it in a state of attack-defense imbalance in its competition with China:

Defense Weakness: The US has a fatal vulnerability in terms of economic resilience and supply chain security. China can leverage its position as the "world's factory" to exert immense pressure on the US supply chain at critical moments.

Offensive Bottleneck: US resources are overly concentrated in finance and services, lacking the industrial innovation capability to quickly and cost-effectively conduct large-scale productization and commercialization. This, in turn, impacts and limits the potential for large-scale mass production in its military industry.

China is currently rising comprehensively in fields such as AI, robotics, lithium batteries, photovoltaics, wind power, rare earth, pharmaceuticals, steel, chemical industry, display panels, automobiles, home appliances, consumer electronics, textiles, medical devices, precision instruments, vacuum equipment, specialty materials, CNC machine tools, industrial software, high-speed rail, shipbuilding, port machinery, construction machinery, nuclear reactors, and power transmission/transformation equipment. This forms a complete and domestically controllable Chinese manufacturing supply chain. In wartime, all these manufacturing sectors can fully transition to military industrial production. Even the combined forces of the US and its allies, such as Japan, South Korea, Taiwan, and the EU, do not surpass China. China's globally leading advantage in supply chain completeness will continue for at least 30 years. The US and its Asia-Pacific allies like Japan and South Korea will find it difficult to revitalize manufacturing, and even barely maintaining the status quo will be challenging. EU manufacturing will continue to accelerate its decline under welfare-state policies, leading to complete deindustrialization. Furthermore, countries like India and Vietnam, and other Southeast Asian nations, will be fundamentally unable to surpass or replace China in most of the aforementioned manufacturing sectors over the next 30 years, remaining stuck in low-end manufacturing or only achieving industrial upgrading in a very few of these areas.

Therefore, in the future New Cold War, the US will be unable to effectively and economically rebuild its critical manufacturing supply chain due to high labor and energy costs and a lack of complete industrial clusters. Compared to China, it will remain in a high-cost, high-risk competitive model, which will trigger even more severe social and political divisions. The structural challenges currently facing the US bear a striking resemblance to the systemic economic decline of the Soviet Union in the late Old Cold War. Ultimately, the US will steadily head toward decline and be defeated by China in the New Cold War.