This chapter discusses the tools that are available—and that should be available—to the democracies to manage the challenges of Cold War 2.0. The discussion begins with some reform proposals for the United Nations and the collective security alliances of the democracies, because the current institutional frameworks that they have to rely on could be usefully bolstered with additional mechanisms. The UN is almost eighty years old. It needs an important overhaul, otherwise it will lose its relevance altogether, at least for geopolitical security matters. NATO, on the other hand, is a good news story, but one that during the course of Cold War 2.0 could be made great if it can undertake global expansion in a sensible manner.
Then the analysis shifts to sanctions, which are a useful mechanism for sure, but are also due for a rethink in some of the ways they are applied and enforced. The world is a more complex place than even thirty years ago when sanctions played a meaningful role in ending apartheid in South Africa. Creative anti-evasion solutions are particularly required when the items being denied to the autocracies are technology based. Cyberattacks also require a different response, including shutting down the Internet for some meaningful period for the entire country where a brazen hacker group is protected by an autocratic government—that will catch their attention. Then there are some tricky “people issues.” These are important because, as noted earlier in this book, ultimately technology and innovation come down to the people who design, develop, and deploy technology. Making all these issues tougher for the democracies in Cold War 2.0 is the hard, cold fact that China is simply a far more formidable adversary than Russia ever was in Cold War 1.
On February 24, 2022, Russia launched a full-scale military invasion of neighboring Ukraine in clear violation of the Charter of the United Nations. The next day the United Nations Security Council (UNSC), the body specifically tasked with keeping world peace, considered and voted on a resolution condemning Russia’s unprovoked aggression and intending to end Russia’s military violation of Ukraine’s sovereignty. Of the fifteen members of the UNSC eleven voted in favor of the resolution, three (China, India, and the United Arab Emirates) abstained, and one country, Russia, voted against the resolution. The resolution did not pass, though, because Russia and four other members of the UNSC have a veto—if any one of them votes against a resolution it does not pass. Russia’s lone vote against the resolution killed the resolution because it was also a veto. Ukraine’s frustration with the uselessness of the UNSC was summed up when the Ukrainian representative told the chair of the UNSC that “Your words have less value than a hole in a New York pretzel.”1
Clearly, the UNSC has to be reformed. The main objective of the UNSC, and indeed the United Nations generally, is to promote peace and prevent war. To this end, the UNSC has some very important and effective powers to take concrete actions against an aggressor state that attacks another country. In 1991 Saddam Hussein, the then Iraqi autocrat, invaded and took over Kuwait by force. The UNSC met, agreed it was an invasion that violated the Charter of the UN nations, and duly authorized a military campaign to push Hussein out of Kuwait, which is exactly what happened. Illegal military might was countered successfully by the rule of international law (backed up by a large expeditionary force) because no UNSC member with a veto voted to block it. This didn’t happen with Russia’s invasion of Ukraine because the very invader also wielded a veto at the UNSC.
Obviously, the main institutional design defect with the UNSC is the veto wielded by each of its five permanent members. Currently China, France, Russia, the UK, and the US have a veto. In the case of Iraq’s invasion of Kuwait in 1991, none of these five powers used its veto, and the UNSC was able to do its job properly, efficiently, and effectively. (Kuwait promptly had its full sovereignty restored as all Iraqi troops were either killed or ejected from Kuwait.) There are other similar cases, thankfully. But at the same time, Russia has used the veto 129 times, the United States 89 times, and the other three veto-wielding members of the UNSC many times as well. In effect, each holder of the veto uses it when it is in their interest to do so. Most egregiously this means if one of these five powers attacks another country (as Russia did with Ukraine), then the veto-wielding aggressor will use the veto to stymie any UNSC action against them. This structural, institutional defect greatly reduces the effectiveness of the UNSC.
This movie has been seen before. The predecessor to the UNSC (and the UN) was the League of Nations, set up after World War I to prevent any further wars. (World War I was supposed to be “the war to end all wars.”) Four countries had a veto in respect of the League—France, Italy, Japan, and the UK—the United States did not because it refused to join the League altogether. When Imperial Japan invaded and annexed the Chinese province of Manchuria in 1931, literally everyone at the League voted in favor of ejecting Japan from Manchuria. The vote in the main League assembly was 42–1. The single vote against was Japan’s, and they had a veto so the League could take no action against Japan. Instead, Japan left the League in a huff. A few years later, when the autocrat Benito Mussolini invaded Ethiopia, all League members (except Italy) voted again to have Italy stopped and the Italian army in Africa sent home. Italy exercised the veto and stomped out of the League in a huff. A pattern can be discerned. When Russia, in 1939, attacked Finland, Russia was expelled from the League.
Bottom line, the veto has to go and the UNSC has to be restructured. Here’s what should be done. Currently the UNSC has fifteen members, five permanent (the big, nuclear weapon–wielding powers with the vetoes) and ten members made up of other countries on a rotating basis for two-year terms, but none of these ten has a veto. The membership of the UNSC should be recast as follows: reduce the number of members to thirteen, all of whom would be permanent. These would comprise the current five (China, France, Russia, UK, US) plus Brazil, Egypt, Germany, India, Indonesia, Japan, Nigeria, and South Africa. And remove the veto, so that none of them can block any matter, and certainly not a matter involving themselves.
Each resolution in the new thirteen-member UNSC would need seven votes to pass, in effect a simple majority. In practice, assuming the democracies voted together, and the autocracies voted together, each camp would have to find additional votes from the nonaligned countries. In effect Brazil, India, Indonesia, Nigeria, and South Africa would be the swing votes. It would be important to add one other very important procedural reform in respect of UNSC voting. Votes at the UNSC votes would be taken “secretly,” such that the final vote tallies would never be made public. All that would be announced was that a resolution passed by the required majority, or failed to pass for not having the required majority. This way, all the countries on the UNSC could exercise their vote the way they really want to, and not just the way some other country is strong-arming or “bribing” them to.
There is useful precedent for such secret voting. Most citizen elections in democracies use secret ballots. The cardinals of the Catholic Church use secret ballots when electing the new pope. There is a lot to criticize about the Catholic Church—i.e., how can it be that toward the end of the first quarter of the 21st century women are still treated as second-class citizens in that church?—but they are steeped in wisdom when using secret ballots to elect their worldly leader. Knowing exactly which cardinal voted for which candidate for pope just serves to divide the College of Cardinals (and the new pope from those cardinals who didn’t vote for him) once they come out of their conclave. This same reasoning applies for the expanded UNSC. Secret voting in the UN will result in sensible, reasoned decisions, and not simply “might is right” results.
The democracies cannot leave their collective security solely in the hands of the United Nations, even if the UNSC reform advocated above were implemented. Moreover, NATO should expand to include all eligible democracies in the world, not just the states in Europe and North America. NATO should become GATO, the Global Alliance Treaty Organization. GATO would have a leadership structure and secretariat along the lines of NATO, with elements drawn from the OECD, an organization comprised of democracies committed to the rule of law, human rights, and an open market economy.2 GATO would have strict criteria for membership. Before being admitted to GATO, each prospective member’s political, legal, and related practices will be reviewed carefully to ensure only true democracies join GATO. Moreover, if a member fails to maintain these rigorous standards, the GATO assembly can expel a member by a simple majority vote. Membership in GATO will confer significant privileges, and therefore each member must continually meet its strict criteria around fair, free, and credible elections, personal rights for all citizens, and the rule of law enforced by independent judges. Certain members of NATO today wouldn’t qualify for membership in GATO.
In addition, each member of GATO must spend an amount equal to at least 2 percent of their GDP on defense. For prospective members, they must attain this level of spending—and actually have spent it—during each of the two years before they join GATO. Any existing member can be expelled from GATO by a simple majority vote if their defense spending falls below this level in any year. Importantly, the GATO secretariat will have detailed criteria as to what constitutes eligible expenditures for meeting the 2 percent defense spending requirement. (For instance, pensions or extended health benefits for veterans don’t count.) GATO will also have rules for how much of the country’s defense spending must be on new, eligible weapons systems. GATO would be a high-performance organization with rigorous standards. It should not be otherwise, because its task is to defend the democracies from militarily threatening autocracies. It is not an overstatement that GATO would be the most important international institution on earth, just as NATO has been the most important international institution over the eighty years since its founding.
GATO’s core function would be to operate a collective defense system, much as NATO does today. If a country attacks a GATO member, then a NATO Article 5–type mutual commitment will be triggered in the GATO treaty, and each member of GATO has to contribute troops and money to the GATO secretariat and military command commensurate with their size, to be used to defeat the unlawful invasion. Assuming Australia, Japan, New Zealand, the Philippines, South Korea, and Taiwan join GATO, they will each be protected against Chinese invasion under GATO’s collective defense regime. If NATO’s European members refuse to join GATO, then at a minimum these six Asian countries, the United States, and Canada (and possibly Chile, Colombia, and Costa Rica) should right away establish PATO, the Pacific Alliance Treaty Organization, a collective defense alliance comprised of democracies in or bordering on the Pacific Ocean. This structure is preferable to the current “hub and spoke” bilateral mutual defense treaty that the US has with each of them, because the alliance would continue even if the US pulled back from defending democracies in Asia because of isolationist sentiment in the US Senate or White House.
There will be many actions by autocrats, and possibly nonaligned countries, taken against GATO members that do not amount to war, but which require a firm response from GATO. Or an autocracy might attack one of the world’s democracies that is not a member of GATO. One important role of GATO is to ensure that GATO members don’t undermine one another’s security by helping an autocracy “divide and conquer” them. For example, in 2021, after the appearance of COVID-19, Australia suggested that an investigation be undertaken by the World Health Organization in China to determine the origin of the virus, so that measures could be taken to prevent future outbreaks. China took exception to this suggestion, and promptly embargoed thirteen products from Australia. One of the products was wheat.
Upon hearing of this Chinese boycott of Australian wheat, Canada promptly contacted China to reassure them that Canada had sufficient surplus wheat with which to meet the forgone imports from Australia. This was a dark day in diplomacy among the democracies. Canada, a fellow democracy and a longtime partner of Australia in many security endeavors, should never have contacted China to sell them more wheat to make up for the embargoed Australian wheat. Indeed, if China had called the Canadians to ask them to sell China more wheat as a result of the Australian embargo, the Canadian response should have been a firm “no.” Instead, the country being economically coerced by China should notify GATO. Then GATO should make a quick assessment of the situation, and if it finds that the member did not bring the autocracy’s coercion upon itself, GATO would notify all members that they are not to backfill the product that has been banned by the autocracy. The point of this system is to deter the autocracy from implementing the ban in the first place.
What if a nonaligned country (not a member of GATO) picks up the slack instead? This raises an interesting opportunity for GATO to again improve the position of the democracies on the global stage. GATO would estimate the value of the additional exports made by the nonaligned country to the autocracy, and then GATO would require GATO members to block imports from the nonaligned country having a value roughly commensurate with that amount. Or it might be that GATO requires its members to embargo the shipment of certain high-tech products to the nonaligned country having the value of the substitute product provided to the autocracy by the nonaligned country. The rationale for this provision is, again, to convince the nonaligned country that the cost of backfilling products wrongfully banned from democracies is too high. The general objective is that through GATO the democracies will be able to push back on threats made against them by autocracies in the new Cold War 2.0 world. The democracies must always remember: none of us is as strong as all of us.
When a democracy is harmed by an autocracy (either through military action or economic coercion undertaken by the autocracy), one of the primary responses available to the democracy is levying economic sanctions on the autocracy. Sanctions have a long and uneven history in diplomacy. They are used to show displeasure where a response is required short of full-on military retaliation. They can also raise the cost to the wrongdoer of their actions, ideally serving as encouragement to have them stop or curtail their violent or economically harmful actions. Sanctions can be effective at disrupting the target country, even if they might not cause an aggressor to change its behavior altogether.3
It came as no surprise, therefore, that a number of democracies banded together to impose economic sanctions on Russia in response to its invasion of Ukraine. The depth and breadth of those sanctions surprised the Russians—and probably the democracies as well, given the relatively anemic sanctions effort after Russia annexed Crimea in 2014. Subsequent to the levying of these sanctions, Canada set a precedent by passing a law that allows the Canadian government to seize sanctioned assets located in Canada and to turn over the resulting financial proceeds to Ukrainian groups involved in rebuilding their war-torn country. Other democracies appear to be interested in following Canada’s lead. Presumably China is taking into account the willingness of the democracies to engage in more extensive sanctions regarding Russia’s full-scale invasion of Ukraine as China considers its options vis-à-vis Taiwan.
Still, several aspects of the sanctions on Russia need to be improved, some dramatically so. First, more than a year and a half after the invasion of Ukraine, there are still some 550 companies with head offices in democracies that are doing business in Russia. This is unacceptable. These companies have to be either convinced through “moral suasion” to leave behind their Russian operations or, at some point (presumably within a year of the commencement of hostilities), the companies should be forced by domestic legislation in the democracies to divest their Russian subsidiary or branch. The democracies cannot have commercial relations with autocracies that invade fellow democracies.
Second, when imposing sanctions on autocracies the democracies need to do much better on trade diversion. For example, a major focus for the sanctions on Russia since 2022 has been to block the Russian economy from getting SCs that are manufactured in democracies. The democracies have been quite successful in shutting down direct shipments of SCs to Russia. This is one of the reasons Russia was ripping SCs out of washing machines and repurposing them for use in precision-guided weapons, not an ideal solution to say the least. On the other hand, in 2022 companies in little Armenia bought 500 percent more SCs than in the previous year, and—surprise, surprise—97 percent of these SCs were exported from the country, the bulk of which went to Russia. The democracies have to be much tougher on this blatant form of trade diversion to avoid the sanctions regime. In effect, if sanctions are worth doing, they are worth doing well. Suitable staff and technical support must be given to regulators in the democracies to police these sorts of anomalies, so that importers in the sanctioned country cannot bring in products through the back door if they were prohibited through the front door. Sanctions are coming to play a very important role in Cold War 2.0 as the democracies improve their ability to collectively wield their economic clout. It is therefore imperative that they crack down hard on sanction-diversion tactics wherever they might occur.
A third proposed improvement relates to the personal sanctions that are levied on individuals associated with the Russian regime. Many of these people are “enablers” of the autocrat, and in turn many of them are known as “oligarchs,” namely businesspeople in Russia who do very well from their connections to the Kremlin. A good number of these oligarchs actually don’t like Putin, and would be willing to disassociate themselves from him if they had a safe path for doing so. The democracies, therefore, should give them such an avenue, particularly where they have assets and businesses outside of Russia. The democracies should make a deal with these oligarchs. The sanctions against the oligarch would be lifted if they do the following: First, in writing they must denounce the war in Ukraine and denounce Putin himself, with these statements being posted on a website accessible broadly on the Internet. Second, they must leave Russia, claim refugee status if required, and live permanently outside of Russia. Third, they must donate at least one-half of their personal wealth to Ukraine to help fund the massive rebuilding effort that will be required at the end of the war.4 And finally, given Putin’s rabid revenge tactics against those who he believes betray him, the oligarch might want to participate in a witness-protection program for as long as Putin runs Russia.
Where an autocracy invades a democracy militarily, as Russia has done with Ukraine, it would be expected that the democracies would implement a comprehensive set of sanctions, with the aim of making the autocracy a pariah state, not unlike North Korea for the last several decades. Since the beginning of Russia’s invasion of Ukraine in February 2022, some fifty countries have sanctioned Russia, and it is running out of a number of key products, especially high-tech goods like SCs and spare parts for commercial aircraft. It is worth considering, therefore, how a sanctions regime would be implemented against China if Beijing were to order the PLA to invade Taiwan. For starters, China’s economy is roughly fifteen times larger than Russia’s. Most important, the economy of virtually every democracy in the world (and each sizable nonaligned country) is either very, or materially, dependent on exports to, imports from, and supply chains within China. Consider the following trade statistics that are very relevant to Cold War 2.0 and possible sanction scenarios:5
1 |
United States |
$582.8 billion |
16.2 percent of China’s total exports |
2 |
Hong Kong |
$297.5 |
8.3 percent (most intended for markets outside HK) |
3 |
Japan |
$297.5 |
8.3 percent |
4 |
South Korea |
$162.6 |
4.5 percent |
5 |
Vietnam |
$147 |
4.1 percent |
6 |
India |
$118.5 |
3.3 percent |
7 |
Netherlands |
$117.7 |
3.3 percent (most intended for EU generally) |
8 |
Germany |
$116.2 |
3.2 percent |
9 |
Malaysia |
$93.7 |
2.6 percent |
10 |
Taiwan |
$81.6 |
2.3 percent |
11 |
United Kingdom |
$81.5 |
2.3 percent |
12 |
Singapore |
$81.2 |
2.3 percent |
13 |
Australia |
$78.8 |
2.2 percent |
14 |
Thailand |
$78.5 |
2.2 percent |
15 |
Mexico |
$77.5 |
2.2 percent |
1 |
United States |
$403.8 billion |
2 |
Hong Kong |
$289.7 |
3 |
Netherlands |
$105.2 |
4 |
India |
$101 |
5 |
Mexico |
$60.1 |
6 |
United Kingdom |
$59.7 |
7 |
Singapore |
$47.2 |
8 |
Philippines |
$41.6 |
9 |
Poland |
$33.1 |
1 |
Taiwan |
$156.5 billion |
2 |
Australia |
$63.3 |
3 |
Brazil |
$47.6 |
4 |
Switzerland |
$42.2 |
5 |
Saudi Arabia |
$40.1 |
6 |
Russia |
$38 |
7 |
South Korea |
$37 |
8 |
Oman |
$32 |
9 |
Iraq |
$25.4 |
10 |
Chile |
$22 |
1 |
Integrated circuits/microassemblies |
$250.5 billion |
up 59.3 percent since 2014 |
2 |
Crude oil |
$228.5 |
up 0.3 percent |
3 |
Iron ores, concentrates |
$169.9 |
up 81.9 percent |
4 |
Petroleum gases |
$59.7 |
up 114.9 percent |
5 |
Copper ores, concentrates |
$50.6 |
up 135.6 percent |
6 |
Soya beans |
$48.2 |
up 20.4 percent |
7 |
Gold (unwrought) |
$40.8 |
no 2014 data |
8 |
Machinery for making SCs |
$34.1 |
up 253.5 percent |
9 |
Refined copper |
$29.5 |
up 24.9 percent |
10 |
Cars |
$26.4 |
down 52.2 percent |
1 |
Phones, including smartphones |
$176.8 billion |
up 16 percent since 2014 |
2 |
Computers |
$145.2 |
up 7.8 percent |
3 |
Lamps/lighting/illuminated signs |
$44.2 |
up 44.5 percent |
4 |
Models/puzzles/misc. toys |
$41.1 |
up 198.3 percent |
5 |
Televisions/monitors/projectors |
$35.4 |
up 19 percent |
6 |
Furniture |
$33.6 |
up 22.5 percent |
7 |
Seats |
$32.8 |
up 49.2 percent |
8 |
Plastic items |
$28.2 |
up 78.7 percent |
9 |
Electric water heaters/hair dryers |
$27.6 |
up 48.9 percent |
10 |
Electric storage batteries |
$25.2 |
up 442.5 percent |
As these tables vividly show, trade relationships can be an asset or a liability or both, depending on the circumstances. Astoundingly, China is the largest trading partner for 152 countries (these tables show just the largest relationships). For instance, it was not shown on the above tables that China is the largest trading partner of Germany, and Volkswagen makes 60 percent of its global profit from its huge operations in China, where the German automaker has forty plants and sells 2 million cars a year. Or consider that the European company Airbus assembles smaller “regional commercial jets” in China, because it sells more of these types of planes to Chinese buyers than in any other market, particularly in the past few years since China-US trade relations (and therefore Boeing’s prospects in China) have deteriorated. This is likely why French president Emmanuel Macron, flying back from Beijing in April 2023 after a three-day sojourn with China’s paramount leader Xi, said to reporters that he didn’t think Europe ought to follow America into a war with China over Taiwan.
These tables explain certain current sanctions already in place. Chapter 5 included a discussion of the American sanctions on SCs, and equipment for making SCs, that Japan and the Netherlands have agreed to honor as well. Table 4 above answers the question: Why SCs? The answer is that for the simple reason that “integrated circuits and microassemblies,” which comprise SCs for the most part, are the product category in which China is the most deficient. (Notice also item 8, machinery for making SCs.) The next product on the list is oil, but China has significant supply of crude from Saudi Arabia, Iraq, and more recently Russia, so that commodity is not a good candidate for sanctions, except to cut off purchases from China. Having iron ore next on the list shows that China desperately requires it from abroad to keep its steel mills running, and this is why Australia and Canada, if they acted in unison, could exert some pressure on China courtesy of their combined iron ore exports. And if you were wondering how soya beans got on the list of President Trump’s trade war against China in 2017, the answer is row 6 in Table 4. In China, soya beans are necessary to feed pigs as 60 percent of the meat consumed in China is pork.
This all raises an important question: What kind of a sanctions regime might be expected from the democracies were China to invade Taiwan? If the Americans participate in the defense of Taiwan, which President Biden has said on several occasions he would do, then certainly complete US sanctions would apply to trade with China, and a large number of allied democracies would participate in these American sanctions, even if they didn’t supply troops or ships for the military operations, including, very importantly, Japan, South Korea, the Philippines, Poland, the United Kingdom, and Australia. Just those countries would represent, collectively 28 percent of China’s exports in 2022 (see Table 2 above), creating a massive hole in China’s economy. If the entire EU joined the sanctions, that would absolutely devastate the Chinese economy, which in turn would cause significant unemployment in China, likely followed by widespread social dislocation, especially in its industrial cities. That in turn would then invariably trigger Xi’s worst fear, namely street protests (reminiscent of the Tiananmen Square demonstrations) that would threaten the very survival of the CCP regime in China.
This is a very different picture from what followed Russia’s 2022 invasion of Ukraine, because when the democracies laid on the sanctions against Russia, Putin had the fallback of redirecting a lot of his commodity exports to China. Xi doesn’t have that security blanket. For China, there is simply no market (nor markets) in the world that could replace the democracies taken together. Moreover, it’s not just the loss of export markets that will start to bite. When the spare parts for Airbus planes run out (assuming France participates in the sanctions), and when the SCs from TSMC are used up, then China will really start to feel economic stress, a condition that neither Russia nor any nonaligned country could alleviate. In this regard, consider that Taiwan sits at the top of Table 3 above, and Australia right behind it. Moreover, it should be noted that items 1 and 2 in Table 5 are somewhat misleading, because thousands of components for the high-tech devices covered by these two categories in fact are sourced from outside China, and then the final products are largely only assembled in China. Therefore, a major sanctions regime against China, following China’s commencement of hostilities against Taiwan, would crater the two export domains that bring the biggest surpluses to China.
This sanctions scenario of course strikes abject fear into the hearts of many businesspeople in the democracies as well, because it represents “mutual economic destruction” on a global scale. As a result, many CEOs of companies based in the democracies are hurriedly adopting a “China plus 1” supply chain strategy; that is, in addition to their source of supply in China, they establish a second, and sometimes even third, source of supply outside China. This is why Tim Cook, the CEO of Apple, has shifted the production of AirPods to Vietnam, and he has (through his contact manufacturer Foxconn, also headquartered in Taiwan) begun to move production of iPhones, laptops, and iPads to India and Vietnam. At a macro level, Xi’s saber-rattling over Taiwan is already starting to weaken the Chinese economy.6 At the same time, though, three weeks before meeting India’s prime minister, Cook was in Beijing trying to calm fears of economic decoupling, telling an audience in Beijing that the “symbiotic” relationship between China and the US over the past thirty years has been mutually beneficial.7 Cold War 2.0 will see a great deal of diplomatic juggling, both by diplomats as well as company bosses. More important than what CEOs say will be what their companies actually do.
In a rational world, driven only by economic dynamics, the interdependence illustrated by Tables 1–5 above would drive both China and the democracies to continually uphold the status quo—China refrains from invading Taiwan, and Taiwan stops short of declaring independence. In effect, the ambiguous yet peaceful arrangement of the last forty-plus years would simply continue. Mutual assured economic destruction would argue a long-lasting—indeed indefinite—deterrence that keeps both sides focused on building wealth and prosperity and avoiding armed conflict. Moreover, Russia’s difficult experience in Ukraine would seem to amplify the wisdom of China leaving Taiwan alone. And yet, despite all these sensible reasons, China’s near war in the airspace and waters around Taiwan continue apace, and have even been escalated in the past couple of years. (When Nancy Pelosi, the speaker of the US House of Representatives, visited Taiwan in the summer of 2022, China effectively blockaded Taiwan with rockets and planes for a full three days, a new apogee of military violence in the cross-strait relationship. In short, in Chinese politics it should be the case that economics wins out over national reunification, but that is by no means a certainty. It would not be a big surprise if Xi Jinping decided (and it is solely his decision in autocratic Beijing) to turn his Cold War 2.0 near war with Taiwan into a hot war.
Sanctions generally deal with goods and information crossing borders. What about people who want to move across a border from a sanctioned state to a democracy? Within several months after Russia’s invasion of Ukraine in 2022, some 500,000 members of Russia’s “innovation cohort” fled their homeland to other countries. This group of Russians included journalists, writers, media types, entrepreneurs, and especially workers in high-tech firms. Their destination of choice was a democracy because of the freedom it afforded them. Some seven months after the start of the war, when Russia called up hundreds of thousands of conscripts to fight, another wave of young Russians, mainly men, fled Russia. Their main destinations were Georgia, Armenia, and the Central Asian countries; relatively fewer of this cohort went to democracies because their jobs didn’t require the values found in states practicing the rule of law.
Should democracies allow these sorts of emigrants to come into their countries? On the one hand, humanitarian instincts argue for admitting them into democracies; they are fleeing a brutal autocratic regime, and what could be more consistent with the liberal values that animate democracies than to provide refuge for those fleeing tyranny? The counterargument, though, is that if democracies want to encourage autocrats to change their behavior, then democracies should not let people into their countries who are fleeing autocratic societies. While counterfactuals are usually not that helpful, imagine what would have happened in Russia if just half of the innovation cohort (say, 250,000 of them) and half of the conscript dodgers (another 250,000 men) had stood their ground and protested Putin’s war by taking to the streets, perhaps three days a week, every week?
As it was, domestic protest against Russia’s war in Ukraine has been anemic. There have been relatively few demonstrations against the war, and those that have occurred see tiny numbers of protesters, generally in the ten-to-thirty range. These were broken up easily by Russia’s state security services and police forces. By contrast, if there had been 250,000 to 500,000 protesters, on a weekly basis, would that have altered Putin’s view of the war? Perhaps not, if China’s methodical oppression of democracy protesters in Hong Kong in 2019 is any indication. Nevertheless, protests in these numbers would certainly give autocratic leaders cause to pause, and it definitely increases their costs of commencing and conducting an unjustified war. It would also make them think twice about next time. Even in China, the protests at the end of 2022 over the COVID-19 lockdowns ultimately had the effect of convincing Beijing to entirely change its approach to fighting the virus. People power matters, and democracies undermine their own interests when they allow themselves to be used by the autocrats as dumping grounds for unwanted dissidents and outspoken critics of the autocratic regime.
This has happened in Cuba, for example, when both in 1965 (the Camarioca exodus) and 1980 (the Mariel boat lift) the autocratic Cuban government allowed tens of thousands of Cubans to travel to and find a permanent home in the United States. These emigrants comprised mainly economic migrants, but also included some political prisoners, and common criminals. As such, Fidel Castro, Cuba’s longtime autocrat, was delighted to get rid of thousands of Cuban citizens who opposed his regime. Putin’s reaction was the same toward the innovation cohort that left Russia in reaction to his war: a source of weakness for Putin was removed by the democracies themselves; how useful that is to the autocrat-in-chief!
Democracies need to be more muscular on these sorts of issues vis-à-vis the autocracies. For inspiration, consider the decision of the Ukrainian government to not allow Ukrainian men between the ages of seventeen and twenty-seven to leave Ukraine in the wake of the Russian invasion. Generally speaking, the right to travel across borders is an important right of citizens in a democracy. Ukrainian president Zelenskyy, however, suspended this right because he needed all able men to stay and join the Ukrainian army. He took some criticism for this decision, but it was the right one. Had the departure of some men initially turned into a flood, the very existence of Ukraine might have hung in the balance. Zelenskyy, incidentally, was very critical of democracies allowing entry to Russians fleeing Russia after the Putin started his full-scale invasion, or for allowing draft dodgers to escape to the democracies.
A similar set of considerations applies to Russian athletes, entertainers, and other high-profile people working in democracies (such as the fifty-seven Russian hockey players in the US National Hockey League, which is 5.4 percent of the total). The sanctions that democracies brought against Russia certainly hurt average Russians living in Russia; they were denied the economic and other benefits of certain goods and services previously sourced from democracies. It is not right that the Russian celebrities could go on earning a living in a democracy as if no war was being waged by their government.
Accordingly, governments in democracies should institute the following program for the Russian celebrities, or any other famous figures from autocratic countries that have been sanctioned for waging war against a democracy. Where the celebrity’s country is sanctioned by a democracy for waging war, if the celebrity wishes to continue working in the democracy then they must do two things to decouple themselves personally from the autocratic regime that started the unjustified war. First, they must make a clear, unequivocal, and widely available written statement (including being posted on the celebrity’s own website) that they oppose the war waged by the autocrat, and that they stand in solidarity with the victims of the war. Second, the celebrity must physically sever ties with the autocracy and continue residing only outside of it. Only if these two conditions are met would the celebrity be allowed to compete, perform, or in any other way earn income in the democracy.
A third category of individual from an autocracy is the university student, typically having completed an undergraduate degree in a STEM subject, who wishes to pursue graduate studies at a university in a democracy. For example, each year about 300,000 students from China attend colleges and universities in the United States. Generally nothing should be done to curb the flows of highly qualified students into democracies from autocracies that are not under war-related sanctions. (If their country has been sanctioned, then the foregoing discussion applies.) Although there are a few cautionary notes to be sounded in respect to students from China and the other autocratic countries, particularly in respect to those students wanting to study in technical domains where the democracy has levied specific sanctions.
Broadly speaking, the host democracy should not take any action to stem the flow of these students. Based on past performance, around 60 percent of these students will want to stay in on the country they studied in. In terms of students from China this percentage drops somewhat, to 40 percent. Moreover, most of the students who stay want to immediately get on in a workplace, and so they are an important resource for the countries that hosted them for their advanced university degree. Indeed, there is a vibrant competition among the democracies with leading universities (typically the US, UK, Canada, and Australia) for landing these students in graduate programs in their country.
One concern with these students, especially those from certain autocracies—namely China or any other autocracy that has been sanctioned by the democracies over technology matters—is that they are receiving too much information from academic scientists in the democracies. The concern is heightened in respect of those students who do not stay on after finishing their degrees, as they could return to their home country and share sensitive information gleaned during their studies in the democracy with their next employer or public research institution in the autocracy. While this risk exists, it is arguably small, especially when compared to the large added value for the host democracy from those students who decide not to return to their autocratic countries. Moreover, relative to the returning students, all professors should be coached to be careful that classified or sensitive research information and data not be shared with any graduate students from autocracies, even if they’re simply working in the professor’s laboratory in order to meet their degree requirement. In effect, the somewhat higher risk profile presented by some of these foreign students is still not that great and can be adequately managed, especially when weighed against the oversized benefits derived from those students who come to the democracies to study and then stay to lay down multi-decade careers.
The autocracies have been very active in inflicting harm on the democracies over the last several decades through various operations undertaken over the Internet. These cyberattacks take many forms, and generally the response of the democracies has been weak and inadequate. The limp response has invariably emboldened the state and near-state actors in the autocracies who perpetrate these cyberattacks; clearly, appeasement never works in these matters. At the same time, the heightened response of the democracies should not be capricious or over the top. The democracies don’t want to cease being democracies in the way they respond to the cyberattacks of the autocracies.
Some of the cyber activity conducted by the Russians and the Chinese can be termed digital, remote espionage. Espionage of the traditional variety, using humans to infiltrate the opponent’s government and military in order to garner intelligence, including photos taken by small cameras, has always been tolerated by governments—to a degree—in peacetime as part of “diplomacy.” Presumably a “reasonable amount” of such activity, albeit undertaken by computers over the Internet, will also be tolerated by all governments. There is even an argument that some of this covert intelligence-gathering activity helps to maintain international peace to the extent it allows a government, especially a significant military power, to glean a better sense of what the other side is up to. (For example, allowing a military power to avoid a major kinetic operation given that through espionage it understands that the true nature of a particular risk is less than originally contemplated.) Ironically, truth obtained through a certain limited type of espionage is not a bad thing, especially given how opaque autocracies can be to outsiders.
On the other hand, it is something else again when espionage morphs into a wholesale infiltration of the computers of the entire government, as was the case in the SolarWinds attack in 2020, in which 18,000 computer systems worldwide were infiltrated by a Russian cyber espionage group (APT29, or “Cozy Bear,” which is affiliated with the Russian state security police, the FSB).8 Such a case requires a forceful countermeasure. The key is proportionality in the response. Therefore, the democracy—or, depending on the extent of the original attack, NATO, or if established by then, GATO or PATO—should craft an action that is commensurate to the original cyberattack launched by the autocracy. In the case of SolarWinds, that would be a return hack that hits Russian private-sector and public-sector entities in a fashion similar to what the US experienced.
At the same time there should also be delivered a warning from the highest levels of the US government—the White House and the Pentagon—that this type of widespread cyberattack “first-strike” is simply unacceptable, and if it continues a disproportionate response would also be forthcoming. That could include, at some point, a kinetic response, but there are several interim escalation points. One would be to cause a shutdown of the entire Internet in Russia, for perhaps fifteen minutes. This can be done, technically speaking. It would be coupled with a message that indicated that longer outages would be forthcoming if the large, state-sanctioned or organized Russian hacks continue. Presumably such an Internet shutdown would only be undertaken once the Internet nodes and infrastructure in the US are sufficiently hardened so that a retaliatory response by Russia would stand little chance of success.
Similar considerations should apply to what is often referred to as “digital propaganda” dispensed by the autocracies. The practice of propaganda has been around for a long time. As with espionage, it is propagated by the democracies as well, as exemplified by the Voice of America radio service in the 1950s. (There is still such a group, but today it operates digitally as much as over radio.) Therefore, today, a certain amount of state-originated propaganda by Russia and China is to be expected, and can be tolerated, such as when ads extolling the virtues of China appear on TikTok screens in America or another democracy.
It is another matter altogether, though, when Internet trolls from Russia and China, such as the Internet Research Authority, ingratiate themselves into American Facebook chat discussions for several weeks or months, and then begin to make comments that are divisive and eventually incendiary (even inciting violence), all in an effort to sow dissension, distrust, and ultimately social conflict in the US or some other democracy. Another red flag is triggered when this type of behavior, or something similar, is deployed into a political discussion in the democracy, especially in the run-up to an election—all with a view to helping a certain candidate get elected who is presumably more favorably disposed to one particular autocracy. This is full-on interference with an election in a democracy, and that crosses the line into completely unacceptable behavior by the autocracy. The response has to be swift and firm—perhaps shutting down the Internet in the autocracy for thirty minutes—something very significant to make sure the message isn’t lost.
The final level of escalation can be contemplated when the autocracy, directly through its own personnel—such as members of the Russian military intelligence, the GRU, or the Federal Security Service, the FSB, or through agents retained and paid by the autocratic government—carry out hacking attacks that through so-called wipers destroy data on corporate or government websites in the democracy, or unleash malware software that blocks use of a computer until a ransom is paid. One such malware attack is described in some detail in chapter 4 (the Colonial Pipeline attack), but there are literally hundreds of these attacks a year in each democracy, invariably coming mainly from Russia and China. Serious pushback is required on this cyber front from the affected democracy or democracies. The reciprocal, proportionate response here would be immediate counter-cyberattacks that levy roughly the same harm on Russia or China. But again, there should be a warning that at some point, fairly soon, the volume of attacks will become unacceptable, and when that point is reached the democracy reserves the right to respond in a more muscular manner, eventually including, but not limited to, a kinetic response. (For instance, in response to the Colonial Pipeline hack, an American response that shut down a Russian pipeline for an equivalent time would be commensurate.)
Chapter 3 touched upon the “Opium Wars” in the 1800s, where Britain traded opium (grown at the time in British India) to China in consideration for the various unique goods that only China had in quantity, such as silk, tea, and porcelain. Ultimately, the opium was extremely damaging to China’s population, with about 30 percent of its people becoming opium addicts. Paramount leader Xi Jinping talks about the Opium Wars as a humiliating period in Chinese history.
Ironically, today the tables are reversed. There is a crisis in America of illicit fentanyl use. Each year about 100,000 Americans die of an illicit fentanyl overdose. Fentanyl is a synthetic drug, the product of biotechnology engineering. The fentanyl comes from Mexico, where it is produced in illegal labs operated by two large drug cartels. The ingredients for the fentanyl, the so-called precursors, are “dual-use” chemicals manufactured in China. China does a roaring trade supplying the precursors to the drug cartels in Mexico; it is estimated to be worth in the tens of billions of dollars a year.
Fentanyl is a synthetic drug resulting from the biotechnology revolution. It is made when ANPP (4-anilino-N-phenethyl-4-piperidine) and NPP (N-phenethyl-4-piperidone) are combined in very precise amounts. The resulting fentanyl is up to fifty times stronger than heroin, and up to one hundred times stronger than morphine. It is a perfect drug for trafficking. It is so potent that only tiny amounts of it are required to get suitably high. Therefore it is easy to transport relatively small amounts over the Mexico–US border but still make huge amounts of money on the illegal importation.
At the same time, though, fentanyl’s very potency makes it extremely dangerous for users. When it is prescribed by a doctor and dispensed by a pharmacist, it is contained on a patch that controls precisely the amount of fentanyl released into the patient’s bloodstream. When a small packet is purchased from an illicit drug dealer, the user has to carefully count out 5–7 grains of it—each the size of a grain of salt, sometimes a little smaller. Pity the user with poor eyesight, or someone who can’t focus while ingesting the drug, or someone trying to count out the correct dosage in a dimly lit alley. Remember, 5–7 grains, and the user gets high. If the user, though, takes 7–12 grains or more, then they stand a very good chance of dying of an overdose. Or, the dealer puts too many grains into the fentanyl pill that he is selling. These are the reasons why each year about 100,000 Americans die of an illicit fentanyl overdose.
The US government has negotiated with the Chinese government to have the latter block the Chinese chemical companies that make the precursors for fentanyl from selling them to the Mexican drug cartels. These interdiction efforts of the Chinese government have diminished as the diplomatic relationship between China and the US has deteriorated over the past few years. Intense corruption among the CCP officials who administer the relevant regulations in China also contributes to the failure of China’s counter-narcotic activities. The Chinese government also allows organized crime groups within China to facilitate transactions in fentanyl precursors.
As part of a new agenda for Cold War 2.0, the US should increase pressure on China to step up enforcement efforts against these Chinese chemical companies. This is not rocket science. When Beijing wanted to outlaw cryptocurrencies in China, it did so with a single decree in 2021 and the threat of very significant jail time for any transgressors. Illegal cryptocurrency stopped circulating in China within a few months. China could do the same with the companies that produce the fentanyl precursors, but it chooses not to. The drug companies that make the precursors are widely known. The Chinese authorities simply have to want to get serious with them. To date the US government has not given Beijing enough incentive to want to do this. And so the carnage of fatal fentanyl overdoses continues on the streets of American cities. Convincing China to take this problem seriously should be an American priority for managing Cold War 2.0. If China won’t cooperate, additional sanctions should be levied on Chinese exports to the US. In all likelihood, though, if Chinese precursors are cut off from reaching Mexico, the large drug cartels will look elsewhere for their fentanyl ingredients. What is really required is that the biotechnology expertise has to be harnessed to innovate another solution to getting fentanyl addicts to a better place. This solution is one of the ways democracies need to strengthen themselves.