1. Introduction: The Specter of Systemic Competition
The promise of the post-Cold War era, a world of global cooperation and shared prosperity underpinned by liberal internationalism, has irrevocably yielded to the friction of great-power competition. This new epoch is defined by the intensifying rivalry between the United States and the People’s Republic of China, a contest that transcends conventional geopolitical maneuvering. It is a fundamental clash over the architecture of the future, waged with microchips and algorithms rather than missiles and tanks. The COVID-19 pandemic, far from initiating this conflict, acted as an accelerant, plunging relations to a nadir in May 2020 when President Donald Trump threatened to "cut off the whole relationship" with China over the virus's origin.
This article posits that the US-China rivalry is not merely a cyclical fluctuation but a structural shift towards a new world order defined by technological bifurcation and geopolitical fragmentation. We acknowledge the compelling scholarly debate: while some, such as Thomas J. Christensen, argue the deep economic interdependence prevents a true "New Cold War (NCW)," others, including Stephen Walt and Yuan Peng, frame the friction as an inevitable structural rivalry between the two most powerful states. This analysis supports the latter, arguing that the competition over Critical and Emerging Technologies (CETs) and the strategic rejection of the status quo by Beijing form a confrontation akin to a Cold War, albeit a new form: a Techno-Ideological NCW. The following sections will examine the roots of this rivalry, the technological battlegrounds, the resulting geopolitical realignment, and the critical future scenarios.
2. The Genesis: From Economic Co-option to Strategic Containment
The current state of systemic competition emerged from the failure of the long-held US strategy of engagement and co-option. The Western consensus, dominant since China’s WTO accession in 2001, assumed that integrating China into the global capitalist system would lead inexorably to its political liberalisation. This assumption proved faulty.
1. China’s Assertive Rise and the "China Shock"
China's economic trajectory delivered a success story unparalleled in modern history. Its sustained Gross Domestic Product (GDP) growth, averaging around 10 per cent for decades, successfully lifted over 850 million people out of poverty. By 2016, China’s GDP (PPP) had surpassed that of the US, standing at US$27.31 trillion (World Bank data).
Crucially, this economic might was paired with an explicit strategic intent to challenge the existing US-led order. Initiatives like "Made in China 2025" (MIC 2025), a plan aiming for 70% self-sufficiency in core high-tech components, and the massive Belt and Road Initiative (BRI) demonstrated an ambition to build a "parallel universe" under Chinese influence. The BRI, along with the establishment of the Asian Infrastructure Investment Bank (AIIB), provides an alternate trading and financial system, directly addressing what Julian Gewirtz terms the "Chinese Reassessment of Interdependence" (Gewirtz, 2020), where Beijing sought to minimise its reliance on Western supply chains and financial systems.
2. The US Pivot to "Revisionist Power"
The US official response marked a decisive shift. The Trump administration’s 2017 National Security Strategy labelled China a "revisionist power" seeking to "erode American security and prosperity." The initial Trade War, which saw the US impose 25 per cent tariffs on US$50 billion worth of Chinese imports (leading to counter-sanctions by China on US$120 billion of goods), was quickly subsumed by a deeper technology war. As academic analysis suggests, while the Trade War was driven by information problems (uncertainty and communication failure), the Technology War is driven by a commitment problem—Washington’s concern over China’s future power capabilities.
3. The Battlegrounds: Technology, Ideology, and Military Leverage
The contest today is waged through three interlocking arenas: the control of foundational technology, the battle for democratic norms, and the expansion of geopolitical influence.
1. The Chip War and Digital Sovereignty
The competition over Critical and Emerging Technologies (CETs), specifically semiconductors and Artificial Intelligence (AI), defines the strategic high ground. The US, recognising that advanced computing chips are the "new oil" for the AI era, has implemented surgical export controls (like those supported by the CHIPS and Science Act) to deny China the most advanced chips ($<16\text { nm}$ process nodes) and the proprietary manufacturing equipment (e.g., ASML's lithography tools).
This has accelerated the technological decoupling. Data from the Australian Strategic Policy Institute (ASPI) shows that US and Chinese technical research collaboration peaked in 2019 and has declined severely since, drifting back toward 2005 levels when adjusted for intensity.6 China counters this by investing massive state capital to achieve self-reliance and has shown impressive R&D gains, becoming the nation to file the largest number of international patent applications at the World Intellectual Property Organization in 2019.7 Furthermore, platforms like Huawei’s 5G, We Chat, and Alipay contribute to the emergence of a Chinese-centric digital ecosystem, challenging the unified global internet.
2. Geopolitical Flashpoints and Maritime Grand Strategy
China's economic strength is projected through military modernisation and an increasingly assertive foreign policy, which is shaking the regional security architecture.
Maritime Ambitions: China’s maritime strategy, viewed through the lens of classical geopolitical theorists like Alfred Mahan and Halfred Mackinder, involves establishing control over Sea Lanes of Communications (SLOCs). The construction and acquisition of overseas dual-use military facilities, such as the base in Djibouti and control over ports like Hambantota and Gwadar, expand its strategic reach.
Volatile Regions: Taiwan remains the most critical flashpoint. As an island democracy and the source of over 85% of the world’s most advanced semiconductors, any miscalculation here risks a catastrophic conflict. China's militarisation of the South China Sea (SCS) and its territorial claims further fuel regional tensions and prompt US-led Freedom of Navigation Operations.
4. Global Fragmentation and the Recalibration of Alliances
The US-China rivalry is creating a fragmented global order, forcing nations into difficult alignments and fundamentally reshaping international institutions.
Alliance Minilateralism
The US has actively pursued minilateral groupings to counterbalance China’s expanding influence in the Indo-Pacific.
Quad and AUKUS: Groups like the Quad (US, India, Japan, Australia) and AUKUS (Australia, U.K., US), a pact focused on deep military technology sharing, represent a coordinated effort by Western-aligned democracies to contain Beijing. The US, in this context, views India as a robust and capable power, strategically loosening restraints on military technology transfer to strengthen New Delhi's maritime capabilities in the Indian Ocean.
The Global South’s Dilemma: Developing nations, however, are increasingly practicing "active non-alignment," seeking to balance relations with both powers to maximise economic opportunities.8 China, leveraging the BRI and its increased financial contribution (it is the second-largest contributor to the UN budget), presents a compelling economic and technological alternative, creating a "competition for the hearts and wallets" of the developing world.
Economic Decoupling and Global Governance
The pursuit of de-risking over deep coupling is transforming global economics. National security concerns now eclipse economic logic, leading to the re-shoring and friend-shoring of key supply chains. This shift contributes to global instability; as the IMF warned, US-China economic frictions had already slowed economies in 90% of countries and regions worldwide even before the pandemic escalated tensions.
Moreover, the rivalry has exposed the vulnerability of global governance. The lack of US-China cooperation threatens to stall progress on shared crises, including climate change, pandemics, and arms control. China’s rejection of the Western multistakeholder model in favour of cyber-sovereignty further fragments the international legal and normative environment, institutionalizing the ideological barriers between communist state-capitalism and liberal democracy.
5. Trajectories: Competition, Fragmentation, or Catastrophe
The future of the US-China rivalry presents a narrow spectrum of outcomes, with potentially profound consequences for global stability.
Scenario 1: Strategic Competition with Guardrails: This optimal scenario, championed by some policy experts, involves both powers accepting sustained competition while establishing clear boundaries and dialogue mechanisms to manage crises. Recent US-China diplomatic efforts to resume military-to-military dialogue and collaborate on fentanyl trafficking and AI risk minimization are examples of these tentative "guardrails" being erected.
Scenario 2: Deep Decoupling and Bifurcation: A continuation of the technology war leading to a fractured global order (J. Gewirtz). This path results in a global economic loss, reduced innovation due to market balkanisation, and the weaponisation of interdependence, where technological and economic links are strategically severed for geopolitical leverage.
Scenario 3: Escalation and Conflict: The most alarming outcome involves miscalculations over flashpoints like Taiwan. As the structural inevitability argument (Walt) suggests, the mutual suspicion and constant efforts to gain advantage could spiral into military confrontation, which would have catastrophic global consequences extending far beyond the two nations.
The world must heed the warnings of this New Cold War. The choices made by Washington and Beijing, to either embrace managed competition or surrender to the forces of zero-sum confrontation, will shape the lives of billions and determine whether this era leads to innovation and competitive advancement or to conflict and global decline.
The US-China rivalry is the defining feature of our contemporary international system. It is a structural imperative, driven by the emergence of a centralized, economic, and technological giant that challenges the existing hegemony through the projection of an alternative global model.
The "New Tech Cold War" is a diplomatic, technological, and ideological struggle, fought across semiconductors, AI, and strategic maritime spaces. The global order is being salami-sliced into two primary technological and geopolitical spheres, evidenced by the rise of the Quad, the strategic importance of India, and the decoupling of supply chains. While the world may not be facing a repeat of the 20th-century ideological confrontation, the bifurcation of global systems and the renewed emphasis on protectionism and technological control make the NCW terminology a useful, if imperfect, heuristic for understanding the current era.
The greatest challenge moving forward is not the elimination of competition, but the establishment of strategic guardrails to prevent miscalculation over flashpoints like Taiwan and to ensure that this rivalry does not lead to global decline, but rather to a managed, high-stakes competition that ultimately benefits innovation.