THE COLD WAR BETWEEN THE UNITED STATES AND CHINA AND THE RISKS OF UNLEASHING THE 3RD WORLD WAR

Fernando Alcoforado*

This article aims to present the characteristics of the cold war between the United States and China, which has multiple dimensions (trade war, financial war, technological war, cyber war and war in space). In this article, each of the dimensions of the cold war between the United States and China and its consequences were analyzed. It is worth noting that the cold war is being unleashed by the United States against China in an attempt to avoid its economic decline and prevent China's rise as a hegemonic power on the planet, which is expected to happen by the middle of the 21st century. The resurgence of commercial, financial, technological, cyber and space wars between the United States and China raises the possibility of the unleashing, on a military level, of the 3rd World War involving these two great economic and military powers and their respective allies whose analysis was processed at the end of this article.

1. The trade war between the United States and China and its consequences

The trade war is how the economic dispute between the United States and China became known. The conflict began in 2017, when then-US President Donald Trump imposed tariffs on Chinese products. The objective was to encourage the purchase of national products, thus increasing job creation in the United States. With the argument that he sought to protect North American producers and reverse the trade deficit that the United States has with China, President Donald Trump announced since 2018 the adoption of tariffs on products imported from the Asian country. The objective was to make it difficult for Chinese products to reach the United States, which would stimulate domestic production. President Trump's central idea was to make Chinese products more expensive, making the population choose to buy national products [1].

The Chinese government, in turn, reacted to these announcements with retaliation, even imposing tariffs on North American products. In response, China decided to increase tariffs and even bar the import of some American products. Furthermore, China's new strategy consisted of devaluing its currency (Yuan) to make Chinese products cheaper and stimulate China's exports. The United States government accused China of currency manipulation. The trade war also turned into a currency war. The Biden administration continued the trade war launched by the Trump administration and took another decisive step in the attempt to contain Chinese power with the technological war against China [1].

The Biden administration has adopted, among other measures, a broad set of export controls that prohibit Chinese companies from buying advanced chips from the United States. These sanctions are unprecedented in modern times. The chips that the Biden government is trying to control are semiconductors, the processors that power cell phones, autonomous cars, advanced computing, drones and military equipment and have become essential to this decade's technological dispute. Therefore, the Biden administration not only continued the trade war with the Chinese, started by Trump, but also elevated it to a technological war [2].

2. The financial war between the United States and China and its consequences

Financial warfare is adopted to destabilize an enemy country's financial institutions and degrade its economic capacity. Destroying an enemy country's wealth through an attack on its market can be more effective than sinking enemy ships when it comes to weakening an adversary. If the attacker can bring a country to a state of near collapse and paralysis, to a financial catastrophe while advancing on other fronts, then the financial war will be judged successful, even if the attacker incurs great costs. Financial warfare has offensive and defensive aspects. Offensive aspects include malicious attacks on an enemy country's financial markets designed to disrupt trade and destroy its wealth. Defensive aspects involve rapid detection of an enemy attack followed by rapid response such as closing markets or intercepting enemy message traffic. The offensive action may consist of interrupting the first attempt or retaliating in the second attempt. In theory, attack and defense converge, as second-attempt retaliation can be sufficiently destructive to thwart first-attempt attacks [7].

China is ahead of the United States with its strategic financial warfare doctrine. In implementing financial warfare, China has adopted more subtle forms of financial attack as, for example, in January 2011; The New York Times reported that China became a net seller of US Treasury bonds in 2010, after being a net buyer. The Times report found this sale strange because China was still accumulating huge dollar reserves from its trade surpluses and was still buying dollars to manipulate the value of its currency, the Yuan [7]. Currently, China is the second largest creditor of the United States' public debt, behind Japan, with a stock of US$835.4 billion.

In the context of the financial war between the United States and Asian countries, including China, an alternative non-dollar-based payment system has been created and is taking shape in Asia and gold has proven to be an effective financial weapon. This situation is contributing to the construction of new banking and payment systems based on gold to replace the dollar. China is consolidating its position as a power in the gold market. The Central Bank of China increased its gold reserves for the ninth consecutive month, increasing its stock by around 23 tons. With this addition, China's total accumulation reached a historic milestone of 2,137 tons. Since 2009, China has persistently engaged in the acquisition of physical gold. In 2023, under China's command, global central banks stepped up gold purchases in an attempt to diversify their reserves away from the US dollar [8].

In addition to adopting gold, China created its digital currency. It is a cryptocurrency backed by its central bank, something that analysts say has increased the country's leadership in the global race to develop digital money by central banks. The digital Yuan is probably the most advanced of the world's central bank digital currency creation initiatives to date. Central bank digital currencies (CBDCs) provide a public way to pay and store money digitally. Digital Yuan can work to pay for products. China has a goal of internationalizing its currency as an alternative to the dollar and the digital Yuan could help with this. The Digital Yuan is like the current electronic payment methods in China. Users download digital wallet apps where they can store funds and which generate a QR code that can be read by payment terminals. The digital Yuan is designed to replace physical cash in circulation, not cash deposited long-term in bank accounts. Unlike cryptocurrencies such as bitcoin, the digital Yuan will not depend on blockchain, a distributed database technology that allows transactions to be validated without the need for banks. Widespread use of the digital Yuan will give China's monetary policymakers greater visibility into how capital flows are going in the country's economy [9].

These financial efforts are being carried out by China alongside malicious efforts in cyberspace and attacks on systems controlling critical infrastructure launched by China's military espionage unit. The financial war launched by the United States against its enemies is causing them to develop actions that contribute to causing damage to the international economic and financial system, which is extremely fragile. Cyberattacks on U.S. infrastructure, including banks and other financial institutions, are on the rise and can take many forms. The success of the hackers and the market reaction demonstrated that markets can be manipulated through a variety of means. These events point to the most dangerous type of financial attack that combines cyberattacks and financial warfare. Capital markets today are anything but foolproof. In fact, they are increasingly prone to failure.

3. The technological war between the United States and China and its consequences

China's economic rise and rapid success must be credited to the Chinese government's miraculous work in lifting hundreds of millions of people out of poverty and into the middle class. China's rapid growth has been driven primarily by progress and investment in technology. China shows exceptional local technological innovation. It is no coincidence that Chinese companies are already leading the technological path of 5G mobile networks and also of the future 6G mobile networks that are expected to occur in 2030 and their capacity is high to trigger a cyber war with the United States. China is following its own path by demonstrating that centralized and planned political systems are capable of boosting development more and faster than systems based on the free market.

China can lead the digital future even if the United States tries to stop it by doing its part. With regard to technological war, for example, two fields of conflict are mentioned: 5G technology and Artificial Intelligence (AI). The United States market has been closed since 2012 to Huawei, holder of the most advanced 5G technology, after the US Congressional Intelligence Committee concluded that Huawei represents a threat to national security. Huawei, a Chinese company, has its 5G mobile Internet network devices at lower prices than those of Korean or American competitors. Since 2017, Huawei has been a leading global manufacturer of mobile network equipment, providing antennas, relays and other infrastructure for mobile operators to connect their customers anywhere [1].

China has launched an AI incentive program. The Chinese government's plan states its objectives to explore this strategic opportunity and be a pioneer in building a competitive advantage in the development of AI, that is, to stop being a replicator and take the lead in this cutting-edge technology. The imminent era of intelligent machines could be a turning point in China's favor in the battle for global hegemony with the United States. The most recent United States National Security Strategy insists on the need to achieve leadership in research, technology, invention and innovation as pillars of American prosperity. To maintain competitive advantage, the United States will prioritize emerging technologies critical to economic growth and security, such as data science, cryptography, autonomous technologies, and artificial intelligence. There is no doubt that the country that exercises leadership in Artificial Intelligence (AI) can lead it to conquer global power. Whoever gains a decisive advantage will be able to use advances in AI to undermine the economic or military power of their opponents [3].

4. The cyber war between the United States and China and its consequences

Science and technology are used in cyber warfare as one of the weapons of modern warfare. Cyber warfare is based on information technology and, nowadays, also on the advances provided by artificial intelligence. Cybernetics is an interdisciplinary science based on scientific research. Cyber warfare basically consists of the use of digital attacks for the purposes of espionage or sabotage against a country's strategic or tactical structures. Espionage aims to steal tactical and strategic information such as data on troop movements, the strengths and weaknesses of the country's military system and any other valuable information about resources needed for war. In sabotage, it can range from a simple action such as taking down the servers of a government website to something extremely harmful such as launching a nuclear warhead. Sabotage boils down to “doing something” unlike espionage, which boils down to “discovering something” [1].

In cyber warfare, hackers with state support, whether members of a country's military forces or financed by that country, attack computers and networks of opposing countries that affect resources necessary for war. They do this in the same way as in any other computer or system, that is, they study the system deeply, discover its flaws and use these flaws to control that system or destroy it. Hackers can use confidential information intended for others (espionage) to gain the upper hand in the battle against their adversary. Hackers can find out the speed of a missile and build another missile or a plane that can outrun it. Can find out where the enemy is moving his troops and plan an ambush. Hackers can find out which scientists are important in creating these weapons, or which politician was essential in raising funds for this weapons system and attack them directly with the use, for example, of drones. When the country has control of these systems, it is also possible to sabotage people and structures. By discovering how troops are communicating, the country gains access to the network so it can confuse the enemy and invade their base. It could break into their systems/accounts and defraud them by posing as one of them. Or it could use this information to control them and blackmail people because of something found on the computer or kidnap their families using private information. Destroying the systems of enemy countries has an obvious result: it destroys what controls that system, and, consequently, prevents it from functioning [1].

In the 2023 United States-China cyber war, China's Ministry of State Security (MSS) accused the United States of hacking into Huawei servers, stealing critical data, and deploying backdoors since 2009 in an effort to remotely access a command center and external control of the invaded ecosystem, creating a permanent path for future contamination. Thus, an attacker could have access to several files and even complete control of its environment. The MSS also alleged that the United States forced technology companies to install backdoors in their software and equipment to conduct cyber espionage and steal data. The MSS responded by calling the United States “the largest global hacker and cyber thief empire.” The MSS stated that US intelligence agencies have done everything possible to conduct surveillance, covert theft and raids in many countries, including China. The MSS specifically singled out the United States National Security Agency (NSA) for carrying out systematic, platform-based attacks against China to loot its important data resources. The MSS stated that the United States has used weapons and equipment on a large scale to carry out cyber attacks and cyber espionage operations against China, Russia and 45 other countries and regions around the world [4].

Report from the United States Department of Defense informs that China's malicious cyber activities predispose the Asian country's preparations for a potential military conflict with the United States. Titled “2023 Cyber Strategy,” the report notes that China has engaged in protracted campaigns of cyber espionage, theft, and compromise against critical U.S. infrastructure, including the Defense Industrial Base (DIB). In the event of a war, the Defense Department believes China will likely launch destructive cyberattacks against the country to hamper military mobilization, sow chaos, and divert attention and resources. As a result of these threats, the Department of Defense has said that cyberspace operations are indispensable to the military strength and integrated deterrence of the United States and its allies. The Department of Defense has defined four strategies it will pursue to address current and future cyber threats: 1) Defend the nation; 2) Prepare to fight and win the nation's wars; 3) Secure the cyber domain with allies and partners; and, 4) Build lasting advantages in cyberspace [5].

5. The war in space between the United States and China and its consequences

The war in space between the United States and China takes its first steps. China and the United States advance in the militarization of space with secret missions. With the launch of the X-37B vehicle, the United States advances in the escalation of the militarization of space. This is the seventh mission conducted by the fleet of unmanned mini space shuttles developed by Boeing and now belonging to the American Space Force. The launch comes after China took its own mini space shuttle into space on its third mission. In both cases, the military keeps the activities that will be carried out in space extremely secret. With each new X-37B mission, its time in space has increased. If the first flight, in 2010, lasted 224 days, the sixth, started in 2020, lasted 908 days – almost three years – before returning to Earth. This, by the way, is one of the unique characteristics of these mini space shuttles, like their larger brothers developed by NASA and launched between 1981 and 2011, because they go up powered by rockets and come down like gliders, using wings to guide themselves to a landing strip. Because they are smaller and unmanned, they are even more versatile than the old NASA vehicles and capable of much longer missions ideal for military applications. What will these vehicles do in space? From a military point of view, they can essentially serve four purposes: force enhancement, space support, space control and force application [6].

The United States is therefore advancing in the escalation of the militarization of space with the launch of the X-37B mini space shuttle. As an increase in strength, the vehicle could offer intelligence and terrain recognition (spy satellite function), communications and meteorology. In space support, the X-37B could be used to take satellites into space or even recover damaged satellites, which is a mission profile that already existed for NASA space shuttles, until the Challenger accident in 1986. As an element of space control, it could have offensive roles (impairing the functioning of enemy satellites and even destroying them) and defensive roles (monitoring the space environment and detecting attacks on satellites, avoiding them). Finally, as an application of force, it could be used to attack ground targets. According to experts, the vehicle could be equipped with precision weapons such as laser- or GPS-guided hypersonic missiles, which could be used to attack targets in enemy territory [6].

Maintaining maximum discretion, the Pentagon says the mission will cover a wide range of tests and experimental objectives. These tests include operating the reusable space plane in new orbital regimes, experimenting with future space domain recognition technologies, and investigating the effects of radiation on materials provided by NASA. Translation: fly higher and further, spy on orbiting satellites and perform scientific experiments. The only thing that is certain is that the two greatest space powers of the 21st century, the United States and China, are expanding the scope of their military actions in space, which, like so many things in these times, sounds both inevitable and undesirable for the future of humanity [6].

6. Is World War 3 avoidable or inevitable?

The resurgence of commercial, financial, technological, cyber and space wars between the United States and China raises the possibility of the outbreak, on a military level, of the 3rd World War involving these two great economic and military powers and their respective allies. In the contemporary era, we see the decline of the United States as a hegemonic power and the rise of China, which tends to play this role in the near future. This situation has already happened in the past throughout the history of humanity when, for example, the Netherlands surpassed Spain economically and militarily and established itself as a hegemonic power from the end of the 16th century until most of the 18th century. The same happened with England, which established itself as a hegemonic power from the second half of the 18th century until the beginning of the 20th century, economically and militarily supplanting the Netherlands and after militarily defeating France in Waterloo in 1815, which also aspired to world power. England, a hegemonic power in the 18th and 19th centuries, was challenged at the end of the 19th century and beginning of the 20th century by Germany, which was fighting for the redivision of the world, which resulted in the 1st and 2nd World Wars. After the Second World War, when the world was divided into two areas of influence, one led by the United States and the other by the Soviet Union, a bipolar system was structured that lasted almost half a century under the risk of the outbreak of a nuclear war. The collapse of the Soviet Union in 1989 led the United States to exercise its hegemony in the world without challenge until the beginning of the 21st century. The hegemony of the United States is now being threatened by China.

The exercise of global consensual leadership by the United States, which existed after the Second World War until the 1990s, came to an end with the post-war crisis of economic prosperity and North American military power [10]. The decline of the United States became more pronounced in the first decade of the 21st century at the same time as China's economic rise, which could become the world's greatest power in the middle of the 21st century. China has become an economic giant, a vital and integral part of the global supply chain, and the most important trading partner for different countries around the world. However, it is not clear whether there will be a happy ending for humanity. Does the rise of China increase the likelihood of war between the great powers? Will there be a new era of tension between the United States and China as dangerous as the Cold War between the United States and the Soviet Union was? If China's prosperity comes at the expense of making the recovery of the economies of the United States and the European Union, as well as the world economy, unfeasible, it could lead the United States and other countries to confront China. This process could generate a situation similar to the Cold War between the United States and the Soviet Union. Robert D. Kaplan, an American journalist who studies international politics, states that China's emergence as a superpower is inevitable and that conflicts of interest with the United States will be unavoidable. He admits a military confrontation between the United States and China [11].

Another possibility is that China is welcomed into the existing order and allowed to prosper within it. This situation could result from the economic interdependence that exists between the United States and China because China depends on the North American market and investments and the United States needs the Chinese Central Bank to buy a large part of the United States' public debt securities. This situation reinforces the position defended by Henry Kissinger, former US Secretary of State, who understood that the American interest would be much more easily achieved through cooperation with China. James Pinkerton, an American writer and political analyst, is a harsh critic of the military containment strategy proposed by Robert Kaplan and Kissinger's accommodation proposal. Pinkerton opposes Kaplan because he considers it unfeasible to have a coalition broad enough to confront China along the lines of the one organized to defeat Germany in the Second World War. Pinkerton proposes that, instead of direct confrontation, the United States government places current Asian powers (India, China and Japan) against each other [11].

From the above, it can be said that there are three scenarios for this conflict:

1) If China's prosperity comes at the expense of making the recovery of the economies of the United States and the European Union, and also of the world economy, unfeasible, it could lead the United States and other countries to confront China. This process could generate a situation similar to the Cold War between the United States and the Soviet Union. The emergence of China as a superpower is inevitable and conflicts of interest with the United States will be unavoidable, resulting in a military confrontation between the United States and China with the outbreak of the 3rd World War.

2) The rise of China as a hegemonic power could be welcome to the existing order. This situation would be a consequence of the economic interdependence that exists between the United States and China because China depends on the North American market and investments and the United States needs the Chinese Central Bank to buy a large part of the United States' public debt securities. In this scenario, American interests would be achieved through cooperation with China.

3) As an alternative to scenario 1 of direct confrontation between the United States and China and its allies, the United States government would make the current Asian powers (India, China and Japan) confront each other, which could result in weakening China's economic and military. The United States would be the major beneficiary in this scenario.

China reacted with predictable fury to the official announcement of the so-called Aukus pact, a historic security agreement uniting Australia, the United States and the United Kingdom that is intended to counter Chinese military expansion in the Indo-Pacific region. Under the pact, Australians will have their first nuclear submarine supplied by the United States. There will be at least three. From 2027, North American and British submarines will be stationed in some cities in Australia. Entering a dangerous path, not taking into account concerns of the international community and even risking a new arms race and nuclear proliferation are just some of the accusations made by Beijing against the trio of allies. China, the most populous nation in the world, with the largest army and largest navy in the world, feels "cornered" by the United States and its allies in the western Pacific. In response, President Xi Jinping recently announced that China would accelerate the expansion of its defense spending and named national security as the main concern in the coming years. So how did we get to this point? Is the world approaching a catastrophic conflict in the Pacific between China and the United States and its allies? [12].

Militarily, China today is a force that cannot be underestimated. In recent years, the People's Liberation Army, which commands China's military forces, has made enormous advances in technology and innovation, as well as the power of its war arsenal. China's Dong Feng hypersonic missiles, for example, can travel at five times the speed of sound and are armed with a high explosive or nuclear warhead. This is making the United States Navy's 7th Fleet, which operates in the Pacific Ocean and Indian Ocean and is based in Yokosuka, Japan, reinforce its military capacity in the face of China's numerous missile batteries on land. China has also organized a rapid expansion program for its nuclear ballistic missiles with the aim of tripling the number of warheads while building underground facilities to house this weaponry in remote regions in the west of the country [12].

None of this, however, means that China wants to go to war. When it comes to Taiwan, Beijing prefers to exert enough pressure for the island to capitulate and submit without the Chinese military firing a single shot. Therefore, although tensions have grown a lot now and new incidents may appear within this conflict, both sides — China and the West — know that a war in the Pacific would be catastrophic for everyone. Despite the angry rhetoric, the escalation of this confrontation is in no one’s interest [12]

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* Fernando Alcoforado, awarded the medal of Engineering Merit of the CONFEA / CREA System, member of the Bahia Academy of Education, of the SBPC- Brazilian Society for the Progress of Science and of IPB- Polytechnic Institute of Bahia, engineer from the UFBA Polytechnic School and doctor in Territorial Planning and Regional Development from the University of Barcelona, college professor (Engineering, Economy and Administration) and consultant in the areas of strategic planning, business planning, regional planning, urban planning and energy systems, was Advisor to the Vice President of Engineering and Technology at LIGHT S.A. Electric power distribution company from Rio de Janeiro, Strategic Planning Coordinator of CEPED- Bahia Research and Development Center, Undersecretary of Energy of the State of Bahia, Secretary of Planning of Salvador, is the author of the books Globaliza??o (Editora Nobel, S?o Paulo, 1997), De Collor a FHC- O Brasil e a Nova (Des)ordem Mundial (Editora Nobel, S?o Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, S?o Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado. Universidade de Barcelona,https://www.tesisenred.net/handle/10803/1944, 2003), Globaliza??o e Desenvolvimento (Editora Nobel, S?o Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX e Objetivos Estratégicos na Era Contemporanea (EGBA, Salvador, 2008), The Necessary Conditions of the Economic and Social Development- The Case of the State of Bahia (VDM Verlag Dr. Müller Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe Planetária (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, S?o Paulo, 2010), Amaz?nia Sustentável- Para o progresso do Brasil e combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, S?o Paulo, 2011), Os Fatores Condicionantes do Desenvolvimento Econ?mico e Social (Editora CRV, Curitiba, 2012), Energia no Mundo e no Brasil- Energia e Mudan?a Climática Catastrófica no Século XXI (Editora CRV, Curitiba, 2015), As Grandes Revolu??es Científicas, Econ?micas e Sociais que Mudaram o Mundo (Editora CRV, Curitiba, 2016), A Inven??o de um novo Brasil (Editora CRV, Curitiba, 2017),? Esquerda x Direita e a sua convergência (Associa??o Baiana de Imprensa, Salvador, 2018), Como inventar o futuro para mudar o mundo (Editora CRV, Curitiba, 2019), A humanidade amea?ada e as estratégias para sua sobrevivência (Editora Dialética, S?o Paulo, 2021), A escalada da ciência e da tecnologia e sua contribui??o ao progresso e à sobrevivência da humanidade (Editora CRV, Curitiba, 2022), a chapter in the book Flood Handbook (CRC Press,? Boca Raton, Florida United States, 2022), How to protect human beings from threats to their existence and avoid the extinction of humanity (Generis Publishing, Europe, Republic of Moldova, Chi?in?u, 2023) and A revolu??o da educa??o necessária ao Brasil na era contemporanea (Editora CRV, Curitiba, 2023).?