The Art of The New Cold War Newsletter
#2
Welcome to edition #2 of The Art of the New Cold War Newsletter. In this edition, we explore a range of topics including cancel culture, Cuba, and the risks of doing business in China.
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Topic 1: Cancel Culture China Style and Historical Nihilism
It is well documented that America suffers currently from a virus known as cancel culture brought on by over exposure to extreme “wokeness.” What is less known perhaps is that China is also experiencing its own brand of cancel culture. China’s version, however, is in many ways America’s polar opposite.
While America’s cancel culture involves the denigration and discrediting of the nation’s history and heroes (e.g. tearing down of historical statutes and monuments, kneeling or turning away during the national anthem, and belief that the entire country was founded upon a tainted legacy), China’s version, by contrast, punishes those who disparage or disrespect Chinese history and national greatness. In short, people are “canceled” for displaying a lack of patriotism. This includes being seen as too “Western” leaning, or not strictly adhering to the Chinese Communist Party’s (CCP) approved historical narrative.
This coincides with a burst of nationalistic activity and sentiment that have swept across China this year—the 100th anniversary of the founding of the CCP. With patriotic tourism taking off as Chinese citizens flock to famous sites of the Chinese Revolution, often while wearing revolutionary uniforms and costumes. And patriotic movies, shows, and books are in high demand.
China’s cancel culture is driven and vigorously enforced and executed by an army of netizens online, who mercilessly terrorize and troll, and demand punishment for any anti-China transgressions, even those long in the past, forcing groveling public apologies—and far worse—from transgressors.
It is not simply a grassroots phenomenon, however, but one openly encouraged and advanced by China’s all-powerful leader, and emperor in all but name, Xi Jinping. Xi has spoken publicly of the need to drive out what he terms “historical nihilism,” which refers to any discussion or research challenging the Party’s official version of history. In February of this year, Xi ordered a nationwide campaign to study Party history ahead of the CCP’s 100th anniversary, and in May it was reported that China’s internet regulator had deleted more than 2 million posts containing “harmful” discussion of history. There have also been reports of people being detained for allegedly “insulting historical heroes” online.
Both America’s and China’s versions of cancel culture are concerned with forms of indoctrination and the rewriting of history to fit with a preferred narrative. But while China’s history is being revised to everything is good, America’s is being revised to everything is bad. This begs the question of which presents the greater threat—enforced national self-love or national self-loathing? What does each say about the current status of their nation? And which is more conducive to victory in the New Cold War?
For the moment at least, one need only look at the increasing confidence, patriotism, and social cohesion of a rising China versus a bitterly divided, conflicted and uncertain America to know the answers.
Topic 2: Democracy vs. Authoritarianism
An overarching theme of the New Cold War, as it was in the First Cold War, is competing governance systems: U.S. Democracy vs. China’s Authoritarianism. With developing nations around the world watching closely to see which system is the more successful, and thus which should be adopted by those in the developing world.
As reported this week by Axios, across the world democracy is in retreat. Indeed, global democracy has been in decline for 15 consecutive years according to Freedom House. And the trend is not only continuing, but may even be accelerating.
A fact recently highlighted in America’s own backyard, with the assassination of Haiti's president showcasing the country’s failing democracy. Other nearby countries are struggling to retain their democracies as well, including Brazil, Peru, and Nicaragua.
There is, however, one big bright spot for the democratic side of the ledger, with Cuba seeing the largest protests against its authoritarian Communist regime in decades. It is too early to tell what the outcome will be, and the Communist regime is cracking down hard on the protestors and blocking their online communications (with Chinese technology, it should be noted). But there is more hope in a long time that Cuba may finally break free of their repressive authoritarian Communist regime once and for all. Something that would certainly be in America’s interest, and democracy generally. Not to mention the optics (and fodder for information warfare purposes) of another Communist Regime, like China’s, falling. Perhaps, it will even serve to begin to turn the tide of authoritarianism’s rise.
So let’s all support—Cuba Libre!
Topic 3: The Increased Risks of Doing Business in China
Doing business in China has always come with a certain level of risk for western companies, including the near certainty of having products counterfeited and intellectual property stolen, among others. But lately the risks have increased significantly as the New Cold War heats up, and calls for economic decoupling grow. A fact that the recent Didi IPO fiasco (highlighted in The Art of the New Cold War Newsletter #1) made clear to Wall Street.
This week the White House is also issuing an unprecedented advisory to warn American companies about the risks of doing business in Hong Kong as China tightens its hold on the semi-autonomous region. Hong Kong is a major international financial hub. But since the CCP forcibly asserted greater control over Hong Kong last year, and abolished the long standing “one country, two systems” governance in place since the former British colony was returned to Chinese rule in 1997, and which had long made Hong Kong the gateway for foreign companies into China, the risks of doing business in Hong Kong have risen dramatically, threatening its status as a global financial center.
New threats include the Chinese government’s ability to gain access to data that foreign companies store in Hong Kong and a recently passed anti-sanctions law allowing the CCP to punish individuals and companies that enable foreign penalties or sanctions to be implemented against Chinese groups and officials.
For instance, under China’s new anti-sanction law, if the US sanctions a CCP official for facilitating the genocide of Uighurs in Xinjiang and a foreign financial institution, like a US bank doing business in Honk Kong, adheres to the US sanctions by blocking financial transfers related to the sanctioned individual, then under the new Chinese law the bank itself could be sanctioned or punished by the CCP in retaliation.
This poses a highly realistic scenario. Especially as the advisory on Hong Kong comes on the heels of the White House’s warning to US business on human rights abuses in Xinjiang, in which US business were warned to exit the region or face potential legal action for using forced Uyghur labor in the future. Many U.S. businesses have a limited understanding of their supply chain in China, and the CCP has made it even harder to avoid using forced Uyghur labor in supply chains by exporting it into other Chinese regions, creating a shell game scenario. To make matters even worse, the CCP has threatened foreign companies that speak out in any way, or even acknowledge what is happening to the Uyghurs in Xinjiang. Some, like the retailer H & M, have even faced crippling boycotts in China for doing so.
Increasingly, US companies are being put on the horns of a dilemma in China as they are forced to choose sides between the China and the US. This is not only driving up the risks of doing business in China, but accelerating decoupling between the world’s two largest economies. Companies are quickly learning that they can no longer have their cake and eat it too in China.