Hot and Cold

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We are in a cold war with China.

That is, as we say, not a prediction. It is an observation.

Feel free to disagree with it. But you also ought not to read anything too portentous into the term. Cold wars aren’t declared, after all. Observing their existence is the limit of what we can do.

In any case, what I mean by the term isn’t complicated. Two political belligerents are now engaged in a foreign policy whose objective is to thwart through all means short of firing weapons the expansion of influence, the establishment of additional international military infrastructure and the expression of territorial control over contested lands, sea lanes or airspace by the other.

I suspect that you might have read the below piece (or one like it) reporting on the statement and sanctions from the EU and US concerning China’s treatment of Uyghur Muslims in its western reaches. If you asked yourself, as we often counsel, “Why am I reading this now?”, it was not because western politicians only just discovered to their collective horror the depth of what is happening in Xinjiang.

U.S., allies announce sanctions on China over Uyghur ‘genocide’ [Politico]

About a week before you read that, perhaps you read coverage of the Quad Summit. It was a highly public meeting among its members – India, Australia, Japan and the United States – to begin the process of contesting the scope of the CCP’s sphere of influence within east and southeast Asia.

Quad Summit’s Vaccine Deal Is Biden’s Bold First Move in Asia [Foreign Policy]

A couple weeks before that, it might be that you read about the USS John McCain steaming through the Taiwan Strait for the first time during the Biden presidency (as an aside, I’m not sure which style guide encourages the use of the verb “rule” for what it is that American presidents do, but nuts to that).

U.S. Navy warship sails through Taiwan Strait for first time under Biden’s rule [NBC News]

Maybe you have read weeks of coverage of the Anchorage meetings, or Secretary of State Antony Blinken’s reference to Taiwan as a “country”, or explicit multi-lateral expressions of commitment to the defense of Taiwanese sovereignty.

In his first trip to Asia, Blinken warns China not to use ‘coercion and aggression’ to get its way [CNBC]

This is certainly not surprising to those who already knew that Taiwan is now Arrakis.

Yet while the emerging geopolitical struggle is not being called a cold war just yet, it is being called everything that a cold war is. It is only a matter of time before an influential politician, writer, journalist, executive or publication begins issuing missionary statements framing and phrasing it as a new cold war. Then some U.S. State Department official will say very officially that it is not a new cold war, at which point everyone will know that everyone knows it is a cold war and throw away all pretense.

And that’s when the narrative war will get hot.

The last time we went down this road, the Soviet Union had a lot of propaganda notes they could play domestically. There were, however, only a relative few they could play to any real effect abroad. What we today call whataboutism is in part referential to the art form it became under Soviet propagandists. In short, they discovered that they had a ready response to any criticism of their brutal and arbitrary system of justice, policing and treatment of political prisoners: “Sure, but what about racism in America?”

If that makes you nod your head a little bit, well, that is the point. The most effective propaganda doesn’t lie. It tells a truth and insists that all facts must be framed around that truth. If you aren’t willing to buy into that framing, well, then clearly you just aren’t honest enough to believe the truth they told you.

That is why the narrative war in this case will operate on another level. The CCP – and yes, our own government – doesn’t just have a few of these notes to play. They have the whole damn piano.

The China dispute is embedded in our most highly charged political narratives. This cold war will be fought in the hot war of narratives about ‘China flu’ and the ‘Wuhan coronavirus.’ It will be fought in the narrative of those terms as inherently racist. It will be fought in narratives about the ‘Biden’s family’s corruption by the CCP’ and ‘the crusade by the political right to create a corruption narrative.’ It will be fought in narratives about a news media that downplayed the betrayals of the world by the WHO and CCP in order to pin COVID-19 squarely on the Trump administration. It will be fought in narratives about a political movement that tried to distract from its own policy failures to pin COVID-19 squarely on Beijing. It will be fought in narratives of de-globalization, reshoring and ‘proximity sourcing.’ It will be fought in narratives of Chinese dominance over Bitcoin mining and whether that jeopardizes narratives of decentralization.

If you’re like me or most Americans, you will probably think somewhere between half and all of those narratives are nonsense. It doesn’t matter. In narrative world, any one of those narratives can be weaponized into targeted and divisive propaganda.

The China dispute is embedded in our most highly charged cultural narratives. This cold war will be fought in the hot war of narratives about how ‘the NBA showed in the Daryl Morey situation that all they care about is sales in China’, and about how ‘the backlash against LeBron James’s support of Beijing over Morey is another sign of American casual stay-in-your-lane racism.’ It will be fought in narratives about American board rooms, C-Suites and ESG offices that couldn’t care less about profiting from the CCP’s abuses of Uyghur Muslims as long as companies say Correct Things about the social and environmental causes that really matter. It will be fought in narratives about companies that don’t care about those causes so long as they say Correct Things about the patriotic implications of opposing CCP influence.

If you’re like me or most Americans, you will probably think those narratives are even more nonsensical than the political versions. It doesn’t matter. In narrative world, any one of those narratives can be weaponized into targeted and divisive propaganda.

The China dispute is embedded in our most highly charged social narratives. We are only days removed from the brutal murder of eight spa workers, most of whom were Asian-American women. We are in a period in which Asian-Americans of various national origins are experiencing an increase in targeted acts of violence and aggression. In just the past week, a Vietnamese-American friend of mine in Brooklyn was followed for several blocks in his own neighborhood by someone shouting racial slurs at him (incorrect racial slurs, too, which I suppose makes it racist in several ways at once). Do you think this very real thing that is happening isn’t going to be pulled into the hot war of narratives? Do you think that the prevailing counternarrative – that the US media went out of its way to frame this emerging racism exclusively as part of Trumpian White Supremacy while ignoring its unnerving prevalence in several other communities – is not going to be pulled into the narrative war, too?

So yes, lots of adjacent narratives out there, ready to be directed toward whatever purpose. What’s the point?

The point is that most of us are under the impression that a protracted conflict with China – even a cold war-style geopolitical struggle – will increase national unity. This is the old saw about politicians looking for an external enemy to unite around, and it is usually true, even if we usually mean it cynically.

Not this time.

Our conflict with China is deeply embedded in every fault line of our existing internal divisions. I fear that a cold war with China will lead to a hot war in narrative world that makes the widening gyre of our politics veer further away from a center that can hold. I think that’s true in financial, economic, political, social and cultural markets alike.

We can’t do much to stop it. We CAN prepare how we will identify and respond to it in our consumption of news and social media, and more importantly, in our relationships and interactions with others.

Clear Eyes. Full Hearts.


  1. Avatar for olowe olowe says:

    Thanks Rusty. Just this morning I was wondering why naming virus variants by geographic origin such as U.K. or South Africa is permissible everywhere in pandemic media yet “China/Wuhan” is verboten. (Y’all don’t live far down the road from Lyme.)

    A question for you: With China relations cooling, will Russia relations warm? The Biden “killer comment” probably didn’t help. But over time, it seems you’d expect we see a shift from Putin being tagged as the source of all U.S. problems to Xi.

  2. It’s a good question, and it is difficult to predict in no small part because it is so heavily dependent on the person of Putin. I’m a seller of the memes of “Trump as a Russian asset”, but I do think a second Trump presidency created a clearer path to Russia establishing itself as a European political force as the US reduced its points of connection with NATO members there. With that off the table, I suppose a warming narrative is possible, but for now it feels more like a wildcard. Still too much domestic political hay with limited international implications to be made from Russia as Bad Guy, I think.

  3. I noticed that even a Cold War with China wouldn’t unite the US when I saw the bare-knuckles domestic naming-narrative battle over calling it Covid or the China flu.

    It’s only been in the last few months that I’ve actually had this demoralizing thought: I’m glad I’m 56 and not younger as I think things politically, socially, culturally and economically in the US are going to get worse and much-more destructive, so I’m glad a lived through a better time.

    That’s not my default setting, which used to be, “eventually, things will get better,” but I no longer feel that way. If even a foreign enemy can’t quasi-unite the US, then I don’t see things getting better until they get much worse first.

    Nice connect of a lot of threads Rusty (I only picked up on the naming-the-pandemic one on my own), I just wish they didn’t augur such bad times ahead for the US.

  4. Thanks, Mark, and I think I remember you making that connection quite some time ago!

    For what it’s worth, I am finding that the more I avoid social and traditional media and the more I focus on communities and networks with whom I desire relationship and connection, the less that destructiveness affects me. I remain encouraged there’s a foundation at the end of all this.

  5. God I hope you are right.

  6. Avatar for O.P.A O.P.A says:

    As always some excellent analysis on the existing narratives in US media. I must say though that I disagree with your pessimistic forecast. Yes, the narratives rest on the US’s domestic political fault lines, however that doesn’t mean that they have to be divisive. I’d raise three traits that could tip the scales.

    First, if China starts trying to aggravate these narratives (more directly, so far I’ve only seen them issue a few critical press briefings). I think the impact of an outside force vocally criticizing America is likely to be received very differently from internal criticism. Something of a “who are they to bad mouth us? Only we get to bad mouth us!”

    A bigger trait about this cold war is that while America is the largest opponent of China, it is by no means the only one. China’s political bullying and economic expansion have unsettled politicians and citizens in across the world, so I think the unity from a ‘common enemy’ could still happen to an extent on the international stage, regardless of its effects domestically in America (or in any of those other countries: India, Australia, Britain, Japan, etc.)

    Lastly, I still disagree that America is doomed to descend deeper as a society. Even if that’s the direction we’re going, I do not believe it’s too late to turn this truck around. I can’t say that’s much more than a conviction at this point - I’m not sure how to prove it other than to do it.

    Anyway, thank you as always for the insights Rusty!

  7. I’m with you, Mark. My definition of a crisis is a situation that commands overwhelming consensus around the need for a response. I don’t think we have too many true crises in America. Most situations seem to elicit calls from one side or the other framing something as a “crisis.” Yet we need a crisis to make hard decisions and take difficult actions - and as far our political environment goes, we’re far from that. Sadly, I agree…we have much further to fall before we can reach the depths needed to elicit a crisis, which - perhaps by definition - we need in order to get to Rusty’s foundation from which we build.

  8. As I recall the not so cold war on Arrakis ultimately resulted in a pretty significant supply chain disruption around the Galaxy. I hope that’s not what you’re predicting for Taiwan and the semi-conductor industry.

  9. Well the Spanish Flu really was the “USA / Kansas City Flu” as it originated there in 1918 at an army base… Spain was the first country to report it through their press (Due to WW1 other countries censored the news)… personally i think calling it the Wuhan Flu seems appropriate but these are different times and probably for the best if these “events” get a scientific name like HIV did…

  10. I am close to your age… this feels worse than the cold war… at least we were all united in the West against the Soviets… now no one seems to care the CCP, Russians, North Koreans hack us left and right… our wars seems to never end and also no one seems to care as only “poor” kids join the army these days… I wish for better days but expect it will get worse.

  11. Avatar for Pat_W Pat_W says:

    No one can predict right now if a “significant supply disruption” will occur as China contemplates closing in on Taiwan, but we can look at the predictable influences that can cause it to be or not to be. I’m drawn to the topic because my partner was involved in construction of the Corning, Inc LCD plants in Tainan and Taichung, and we used to bike past the TSCM plants in those science parks. If you have never seen Taiwanese science parks (huge manufacturing areas) you cannot imagine it. There is nothing comparable in the US, though back in the 60s and 1970s Detroit’s auto plant areas were the equivalent for their day. The parks are planned so that complementary businesses are next to each other. Corning is across a small 2 lane street from AU Optronics, a company that assembles flat panel displays for various companies. Glass was loaded on flatbed semis and driven a few hundred feet into AUO.

    If you want to get a sense of scale look up TSMC, Taichung, Taiwan, on google earth. That plant is entirely new since sometime after 2012, when we left. I’m guessing it covers roughly 200 acres. TSMC has 16 plants in 4 cities around Taiwan, with some grouped together such as in the one in Taichung. They also have a plant in Nanjing and one in Shanghai. The one in Shanghai does not appear to be nearly as large.

    While TSMC is forming partnerships with US companies and more fabrication plants will be built here, it may be 10 years before we can expect to meet a larger proportion of our our semiconductor needs. We do not move as fast as countries with more central control of land use. That is a wild guess, but whatever the window is, China will have it figured out, along with a clear strategy for either using chips as hostages in order to bully the West, or for taking them by force and pressure in order to launch their own electronics industries to world dominance. The Quad countries will be watching and plotting just as carefully in the effort to protect their own interests.

    Below is a link for a nice graphic of global semiconductor companies and their home countries. I wrote about TSMC because it is, to my knowledge, currently making the most advanced chips (though that is complicated topic): chip companies from 2012- 2020 by annual sales

    Those are real geopolitical concerns and they will drive the political narrative. As always, Rusty, thank you for helping us clarify our own thoughts.

  12. Very informative. Phoenix, AZ is one place in the U.S. where land can be readily accumulated. TSMC is in fact making a commitment in Phoenix on the scale you’re describing. I’ve interpreted that to mean they are hedging their bets for just the sort of moves you’re describing from China. Unfortunately lead times are long at this scale. The U.S. supply chain in the semiconductor equipment industry is going to be hard pressed to support this level of investment.

  13. Thanks, OPA! I appreciate your thoughts and comments, as always!

    To your first point, I think that a very small share of China’s propaganda effort will be focused on official channels. In the next few months, for example, I think we are pretty likely to see a, “Honestly, isn’t our border problem just as bad as the Xinjiang labor camps?” article in some widespread publication. Perhaps even an “isn’t it easy to imagine Trump fans getting behind a prison camp for Muslims? Are we really so much better than the CCP?” article. Does that framing catch on? Hard to say, but that’s the form I think this starts to take more often than not.

    I mention some of the other participants in this ‘conflict.’ But speaking personally, I don’t see how it matters on the narrative dimension being discussed. Perhaps this gets back to your final comment on the rather more dour outlook being conveyed here, but I have trouble seeing any polarized American tribe caring very much about whether India or Japan was in the same boat with us. Doubly true in narrative space, where it is entirely possible that just becomes another lever to drive in as each tribe decides if they’re going to align themselves with nationalistic isolationism, nationalistic interventionism or multilateral interventionism.

    As always in our discussions here, I hope you’re right and I’m wrong, and would hope we’re all trying to act with clear eyes and full hearts on this kind of thing either way!

  14. Intel did a 180 this week on going more outsourced on its chips and just announced a major capacity expansion in AZ. A probable tap on the shoulder from Uncle Sam. Although Third Point has recently been active in rattling the board’s cage.

  15. There’s a hard truth that I believe the vast majority have yet to accept: we are not the unwitting victims of propaganda, we are willing consumers of it. Buying Nikes went from being about a sneaker brand to being a BLM shibboleth. Never mind that those liberation shoes are sewn together by slaves in some concentration camp in Xinjiang, this is all about sticking it to those Red State Rubes who don’t like Kaepernick kneeling. Oh, and have you heard about My Pillow? Well yeah, it’s kind of a shitty product, but the owner has some really good information about how a US election was stolen. We should buy some pillows and maybe head to the Capital and see if they’re giving any guided tours.

    China wins this cold war 11/10 times it’s engaged in because they actually want to win. We want tribalism, stimulus checks, affordable and personalized porn (thanks OnlyFans!) and meme stonks. If corporate media had any brains at all they’d run the exact same CCP propaganda they’re running now, but they’d start charging for it. They might as well get richer while we devolve into the end stages of the empire.

    Sorry that this is darker than my usual takes, but I don’t see how we get ourselves out of this mess.

  16. I got really angry the other day seeing the 50th iteration of 5000 mistreated children at the border. Not because I think we shouldn’t care about how America treats the people who come to our borders or invest in the Northern Triangle, etc. but because these stories are designed to keep our focus off of many other things that are far more important. In a world of 8 billion and a country of 340 million or thereabouts 5000 is meaningless. Like the doc saying I know you came in for a pain in your gut that might be pancreatic cancer, but we should really start with that pimple on your forehead.

  17. Layers upon layers of protections to this trend. Even the fetishization of opposition to social media / tribalist agitprop accrues just enough social capital to make it worthwhile to consume it, complain about it and make practically zero changes in one’s own life to respond to it.

  18. Recently, I’ve seen a shift in my local politics (last few years). The “drain-the-swamp” theme that grabbed the nation back in 2016 has become hyper local (at least in my world). Essentially, pitting change for the sake of change (devil you DONT know, is better than the one you DO) against tenure and experience. Candidates with No-experience have started running on the platform of “we need a change”. Using the same playbook seen on the national stage (no specific issues being championed, instead focus on desire for something better which will only come with fresh blood).

    I’m all for informed decision making, even if you disagree with my position. But, this strategy plays on laziness of the electorate. The scary part, I think the strategy will work.

  19. > We can’t do much to stop it.
    Yes, we can. We can all learn Esperanto
    The problem with the world is rivalry at the top, and bribability at the bottom.
    Esperanto reduces rivalry by enabling cooperation.
    Esperanto reduces bribability by enabling productivity.
    The world needs to avail itself of the raw power of Esperanto!
    Or, to put it into narrative form:
    If everyone would learn Esperanto, it would be an immense economic stimulus and permanent boost for the world economy, when companies can be formed with total liquidity, no longer stopped by the language barrier, or bigoted viewpoints. Esperanto is the original rising tide that lifts all boats. As successful investors will tell you, diversification is king. But nothing supports diversity / diversification like Esperanto does. Esperanto’s star is on the rise.

  20. Swap out Esperanto for crypto and you’d have at least three people presenting you white papers by the end of the week.

  21. Yikes! Y’all acting like you’ve been locked down for a year or something.

    Putting a lot of store in Neil Howe’s view and just hoping we get on to our next Awakening Cycle and put this (your expletive here) Crisis Cycle behind us.

  22. Having read the Strauss-Howe generational theory, the set of Fourth Turnings in history have not been painless to get to the Awakening Cycle. Societal interconnectedness is the highest it has ever been due to communications and trade. The forms of government that dominate the next cycle (autocratic or democratic) hang in the balance. Our collective wishes that getting to the other side be comfortable are at odds with all history.

  23. I’m not built for comfort, I am built for speed. Staying positive is a survival tactic. Plus its the only moment we have even if it gets hairy for extended periods of time.

    I am curious how the interconnecting works out. Both with travel and exchange of information. This last year is the most I have felt government in my life since being 17 and sweating the draft.

  24. China and Russia share a huge border, are our two biggest rivals on the world stage, have vastly different cultures, and yet we hear nothing about the relationship between those two countries? Why? Is it of no real relevance to us (seems doubtful)? And how is their relationship going, if any pack members have a sense of it please share.

  25. Avatar for Pat_W Pat_W says:

    Thank you for the link, sir. Something that greatly puzzles me is how TSMC can expect a long term and adequate water supply in an arid region like AZ. Right now there is a drought in Taiwan and the affected areas are reducing residential water allotments in order to continue supplying the water-intensive chip industry with the water it needs. I’m skeptical Phoenix water utility could pull that off but it does not matter. Drought in Taiwan is occasional. Drought in the Southwest is endemic and those who study water make dire prediction for even the near term. We must hope that TSMC expects success in redesigning it’s process so it uses…VERY little water.

  26. Avatar for Pat_W Pat_W says:

    GeoPolitical Futures periodically sends out reports about this. The price is reasonable.

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