It remains, as a final task, to sketch out how a world buffeted by Cold War 2.0 should function satisfactorily from the perspective of the democracies. In essence, the democracies would decouple some of their technology from the autocracies, but largely only for the four accelerator technologies (artificial intelligence, high-performance semiconductor chips, quantum computing, and biotechnology) and certain other important technologies. The total volume of trade impacted would be about 25 to 35 percent of the current mix of trade between the democracies and China, though there would be some broader strategic, political, and even cultural geopolitical and security implications, especially for the autocracies.
The reason for the tech decoupling is simple—the democracies should not give the autocracies the rope then used to hang the democracies. Moreover, this suspicion that the autocrats want to “hang the democracies” is reasonably held so long as the autocracies refuse to live in a global community animated by their adherence to a rules-based international order. The second rationale for tech decoupling is so that the democracies do not contribute to the technology that the autocrats use to hang their own citizens. The world’s most insidious digital system of human surveillance, control, and oppression should not include AI software written in Silicon Valley or semiconductor chips designed in the United States and fabricated in Taiwan. How does Cold War 2.0 end? One of three ways. China decides to emulate Japan, South Korea, and Taiwan; becomes a responsible global citizen and a domestic democracy; and gives up its designs on Taiwan. Or China attacks Taiwan and the democracies win that war. Or the current bifurcated world of technology and innovation continues indefinitely, with the democracies enjoying an ever-superior standard of living relative to the increasingly isolated and technologically stunted autocracies. Then when Putin and Xi leave power, their successors effect economic and political regime change in order to catch up to the democracies.
The core framework for technological decoupling in Cold War 2.0 would operate as follows. The world would be divided into three main groups of countries. The democracies will encompass the United States, the other major democracies listed in Table 1 of chapter 10, and a number of smaller democracies. The major democracies ideally would band together into a GATO (Global Alliance Treaty Organization) or perhaps more likely they will stay somewhat more loosely associated on the world stage as they currently are, though with a strong regional NATO in Europe and an “Asian NATO” in the Pacific, called PATO (Pacific Alliance Treaty Organization). However their global or regional alliance structure unfolds, the democracies will be recognized for holding free, fair, and credible elections; upholding the rule of law, overseen by independent judges; ensuring personal political freedoms and gender and social equality; fostering a free and independent media environment; and promoting an open market economy with effective public oversight and regulation, including promoting the use of the four accelerator technologies (AI, SC, QC, and BT), and certain other technologies, in a manner consistent with human rights, consumer choice, and consumer protection (the so-called standards of democracy).
By contrast, the autocracies—principally China and Russia, but also Cuba, Iran, Nicaragua, North Korea, Saudi Arabia, Syria, and Venezuela—will continue to be identified in Cold War 2.0 by the fact that each of them has a single political party, and if they have elections at all, they are manipulated by the single political party to predictable outcomes. In autocracies there is no rule of law, the judiciary is a cog in the autocrat’s social control machine, only limited personal freedoms are permitted at the whim of the autocrat, the autocrat employs thousands of state security police to keep the autocrat in power by use of force and violence, and the autocrat also relies on a state-of-the-art technological monitoring/surveillance/propaganda dissemination system (which uses AI, SCs, QC, and BT, as well as complete control over media outlets) to cement his position in power. There is no oversight of the autocrat’s behavior, including whatever economic benefits he bestows upon himself and his enablers, especially the state security police and the military. The citizens for the most part accept this arrangement because the autocrat cements his legitimacy by ensuring that some of the wealth of the country will be shared sufficiently with them (through better pensions, higher minimum wages, and the like).
The third group of nations in a tech-decoupled world are the so-called nonaligned countries. Some of the nonaligned countries are democracies with some strong elements of autocratic practices, but they do not wish to join a group like GATO, or even a regional alliance of democracies, largely because they see their economic success closely bound up with autocratic China. Similarly, the autocratic nonaligned countries usually want to be closer to Russia (in order to get weapons and, often for African nations, mercenaries from Moscow) and sometimes China, but not so close as to be in a formal alliance with either of them. In effect, the nonaligned states are driven mainly by interests rather than values in their geopolitical dealings, and they are constantly looking for transactional opportunities to advance their national interests. Expect democracies and autocracies to continually bid for their favor. This is the “kasbah geopolitics” dimension of Cold War 2.0.
In order to understand how a global geopolitical technology decoupling would work as part of Cold War 2.0, it is first necessary to assess at the aggregate, macro level the overall technological and innovation strength of the democracies, the autocracies, and the nonaligned countries relative to the data about the various technologies referred to in chapter 5 to 8 (in terms of the accelerator technologies) and chapter 9 (in terms of the other important technologies). This is done in Table 1 below by weighting different technologies and innovation-related assets into a single, manageable “Technology—Composite Scores” schema.
Technology Composite Scores |
US |
Other Dem |
China |
Russia |
Non-Aligned |
Total Dem |
Total Auto |
Artificial Intelligence (6x) |
36 |
12 |
12 |
0 |
0 |
48 |
12 |
Semiconductor Chips (6x) |
18 |
30 |
12 |
0 |
0 |
48 |
12 |
Quantum Computing (6x) |
30 |
6 |
24 |
0 |
0 |
36 |
24 |
Biotechnology (6x) |
24 |
18 |
12 |
6 |
0 |
42 |
18 |
Universities (6x) |
36 |
18 |
6 |
0 |
0 |
54 |
6 |
Subtotal |
144 |
84 |
66 |
6 |
0 |
228 |
72 |
Defense Industries (3x) |
18 |
3 |
6 |
3 |
0 |
21 |
9 |
Nuclear Power (3x) |
6 |
6 |
9 |
9 |
0 |
12 |
18 |
Space/Satellite (3x) |
15 |
6 |
6 |
3 |
0 |
21 |
9 |
Cloud Computing (3x) |
12 |
3 |
9 |
3 |
3 |
15 |
12 |
Jet Engines (3x) |
15 |
9 |
3 |
3 |
0 |
24 |
6 |
Critical Minerals (3x) |
3 |
9 |
13.5 |
3 |
7.5 |
12 |
16.5 |
Subtotal |
69 |
36 |
48.5 |
24 |
10.5 |
105 |
72.5 |
Fusion Power (1x) |
8 |
1 |
1 |
0 |
0 |
9 |
1 |
Telecom |
3 |
3 |
4 |
4 |
0 |
6 |
8 |
Internet Platforms (1x) |
6 |
0 |
4 |
0 |
0 |
6 |
4 |
Software (1x) |
7 |
2 |
1 |
0 |
0 |
9 |
2 |
IT Services (1x) |
5 |
2 |
2 |
0 |
1 |
7 |
2 |
Automobiles (1x) |
3 |
5 |
3 |
0 |
0 |
8 |
3 |
Shipbuilders (1x) |
1 |
5 |
4 |
0 |
0 |
6 |
4 |
Commercial Aircraft (1x) |
4 |
4 |
1 |
.5 |
.5 |
8 |
1.5 |
Robotics (1x) |
2 |
7 |
1 |
0 |
0 |
9 |
1 |
Financial Services (1x) |
5 |
2 |
2 |
1 |
1 |
7 |
3 |
Subtotal |
44 |
31 |
23 |
5.5 |
2.5 |
75 |
29.5 |
Total |
257 |
151 |
137.5 |
35.5 |
13 |
408 |
174 |
These figures track the categories of technologies and other items in chapters 5 to 9, and then apply some weightings. The accelerator technologies and the university rankings are worth six times more than the next category of important technologies, which in turn are weighted three times more heavily than the final group of technologies. Then through the exercise of additional judgment, final figures are given to each item, which are then multiplied by the weightings to achieve the composite scores. It’s not rocket science, and some readers will quibble about the respective weightings assigned to various line items, but the overall conclusion is sound (even if some figures are adjusted, etc.): the United States alone is materially stronger than China when it comes to technology and innovation, and if the US and the other leading democracies are taken together, then their collective advantage over China and Russia increases dramatically (i.e., the democracies together wield more than twice the technological/innovation heft of China/Russia, 366 to 154.5). Some lesser takeaways are also important, including that the technology/innovation assets of the nonaligned countries, and even Russia, are very modest indeed.
For the foreseeable future the democracies will be the center of gravity for technology and innovation in the world. China will make important discoveries as well, but not nearly of the quantity or especially quality as will come from the universities, companies, and research institutes located in the democracies. If there will be efficient fusion energy or workable high-energy beam weapons in the next twenty years, as well as cures for cancer, dementia, and diabetes, these game-changing advances in innovation will be made in the democracies and not the autocracies. Moreover, the lead that the democracies currently have over the autocracies will not be relinquished any time soon. Bottom line: the democracies will be the primary engine of technological progress in the world. The democracies, through their open economies that allow competitive displacement to work its productivity enhancing magic, also will be able to benefit from these innovations far more than the autocracies. The democracies also are more adept at transforming these paradigm-changing technologies into instruments of military power, an exercise that enough democracies—and especially the United States—are willing to fund with a material portion of their surplus national wealth to produce the leading weapons of our time. This conclusion, and the figures found in the table above, make clear what the democracies have to do in Cold War 2.0 to effect a sensible strategy of decoupling technologically from China.
Before discussing technology decoupling in some detail, it must first be acknowledged that while generally the following talks in terms of “the democracies,” one simply cannot meaningfully discuss the strengths (and weaknesses) of the democracies without first analyzing the prime position of the United States in the constellation of democracies. As seen in Table 1 above, the United States plays the central, leading role among the democracies when it comes to innovation and technology development. The American secret sauce begins with its world-beating universities. These institutions then attract the world’s smartest people, both domestically (from a US population of 330 million, which is large by global standards) and, very importantly, internationally. In the contest that is Cold War 2.0, the US doesn’t need to have a population of 1.4 billion like each of the two most populous countries on earth if, at the end of the day, it attracts the best and brightest 200,000 non–US university STEM undergraduates every year to US universities where they will pursue graduate degrees, most of whom who will then stay on and become US citizens.
The other ingredient in the American secret sauce of innovation and technology development is the outsize role of private investment, in particular venture capital and private equity investment directed by people who are deeply versed in science and engineering, and who have previously operated entrepreneurial companies themselves. The biggest shortcoming in the Chinese model of technology development is the oversize role of government in the funding of early- and mid-stage technology companies. Public bureaucrats, especially ones beholden to an autocratic system of political power, are unable to make sufficiently knowledgeable capital allocation decisions for an entire sector such as artificial intelligence, high-performance semiconductor chips, quantum computers, and biotechnology; even if they could, they dare not allow the dynamic of competitive displacement to operate as it would bring down on them the wrath of incumbent investors, mainly regional governments that have forked out billions of dollars on the old technology and are anxiously waiting for solid returns from it. Governments and agencies also give some financial support to technology companies in the US, but typically these funds are used only to amplify private investment decisions, and not to make the core, threshold technological and business model decisions regarding the direction and pace of development, and funding, of a particular promising innovation initiative.
The distinction between the American innovation funding model and the autocratic one was striking during the last three decades of Cold War 1, especially in the domain of computers. The Soviet Russian model of tech development finally collapsed in a great heap in the late 1970s and early 1980s, leading to the demise of the entire regime a short time later. The Chinese, especially under supreme leader Deng Xiaoping, remedied some of the failings of the autocratic economic model after Mao Zedong’s death. While these changes resulted in a fairly low-tech economic unleashing that was still quite extraordinary in its macro effect (pulling hundreds of millions of Chinese out of poverty), for the most part the resulting investment and operational model for doing innovation and technology development in China was still too government oriented, too top-down, and too dependent on scientists and technology entrepreneurs currying favor with the autocrat and his coterie of enablers—including regional “princes” of the CCP, who to this day play an important role in handing out all sorts of subsidies to tech companies, but who typically have never actually run a high-tech company before. The dramatic failure of China’s “Big Fund I” to finance and develop meaningful high-end semiconductor manufacturing equipment makers in China that could make up for today’s embargo of such machines from the democracies is the ultimate example of this failure, but by no means the only one.
The exceptional American funding and development model for innovation has allowed the United States to create by far the wealthiest country in the world. This national economic preeminence then allows the US to play the other critical American geopolitical role, which is to fund, sustain, and deploy internationally a military that is large and extremely technologically driven. The US defense budget dwarfs all others in the world. This in turn allows the US to provide vast amounts of business to the five largest defense contractors in the world, all of whom, importantly, are private sector players. These US companies dwarf the five largest Chinese defense contractors, all of whom are publicly owned, and Russia’s defense contractors are smaller still. It is no wonder that dozens of countries look to the United States for technological and innovation leadership in the military sphere. This trend, an important element in Cold War 2.0, will only accelerate given that Russia has displayed its incompetence on the battlefield in Ukraine, including when its hypersonic missiles, which Putin previously said were invincible, were in fact routinely shot down by America’s Patriot antimissile system over Ukraine in 2023. (It appeared that some of the missile’s inventors were arrested for treason partly as a result, because every such setback in an autocracy requires a scapegoat.)1
Since the end of World War II, American preeminence in the technology and military domains has been accompanied by American politicians and opinion leaders generally holding a global outlook, such that American diplomats and forward-deployed military units have been the primary bulwark against autocratic regimes around the world, including during Cold War 1. The current war in Ukraine, where the world’s second most powerful autocracy, Russia, is attempting to destroy a much smaller democracy, would have ended soon after Russia’s full-scale invasion in February 2022 but for American leadership in rallying NATO partners to supply weapons and a financial lifeline to Ukraine—by far the biggest portion of which has come from the United States itself. Without the US, there would not be an independent Ukraine today. A similar narrative has unfolded in the Pacific region. Without US support for Taiwan, a small democracy menaced by the world’s leading autocracy, the island nation just off the coast of China would have long ago been swallowed by its huge mainland neighbor. Bottom line, there is no path to a soft landing in Cold War 2.0 without the United States playing a major leadership role. Indeed, without US engagement in Europe and Asia, Cold War 2.0 has a very different, and likely very bleak, ending for the democracies in these two regions.
Beyond Ukraine and Taiwan, though, it is astounding how central the US is to the preservation of democracies in many other regions as well. In North America, it pains me to say (because I’m Canadian), but the Liberal Canadian government has simply stopped taking defense seriously, presumably because it believes the US will defend it from the Russians and the Chinese regardless of the size of the Canadian defense budget, which is well below the NATO minimum of 2 percent of GDP. In the Middle East, Israel’s survival depends, at least in part, on the US. Even India, long the unofficial leader of the nonaligned countries, is now happy to have a closer security relationship with the US, including through the Quad (Australia, India, Japan, and the United States), given New Delhi’s fraught relations with the Chinese (though there are certainly limits to India-US friendship; see below).
In Asia, the countries of Japan, South Korea, the Philippines, and Australia have asked the US to help them backstop their defense, primarily against an expansionist China. The history of the Philippines over the last twenty-five years illustrates well the crucial role of the US in helping to preserve the sovereignty of its allies in the region. In 1999 the Philippine Senate voted not to renew the leases for America’s large naval (Subic Bay) and air (Clark) bases in the Philippines, and the US military effectively left the country. Seeing an opening, soon thereafter the Chinese began their assertive diplomacy in the South China Sea, including their island-building in waters clearly belonging to the Philippines. More recently, for six years the Rodrigo Duterte government cozied up to China, and numerous Chinese firms began investing in Luzon, the country’s main northern island—the one that would be particularly relevant if China launched an attack on Taiwan. The current Philippine government, alarmed by China’s growing influence, has reengaged with the US, and now allows the American military to use nonpermanent sites in the Philippines to store munitions, especially on Luzon, in the province of Cagayan. Unfortunately, the damage is done, as it will be difficult to dislodge the Chinese from the territorial gains it has already made in the South China Sea not far from the mainland of the Philippines. The stark reality is, no democracy in the world is currently able to stand up to China or Russia in anything approximating a military or quasi-military confrontation without having the United States firmly committed on the side of that democracy.
Beyond global security, the role of America on the world stage is critical and multifaceted. There is simply no path to a solution on global climate change without American technology, diplomacy, and money. There is no meaningful international preparation for the next global pandemic without American vaccine know-how and pharmaceutical distribution channels. There is no realistic regime of regulation of the high seas (whether for overfishing or irresponsible seabed mining) without American satellites and naval vessels. And the list goes on to include world hunger and poverty, international terrorism, and international crime. Of course, other democracies (especially those comprising the European Union) and one of the autocracies (China) have to be a part of these solutions, but only one country—the leading democracy—is indispensable to their success; the United States of America.
It is precisely because Cold War 2.0 requires the US to play such a linchpin role as the leading democracy in the world that the rise of autocratic and isolationist tendencies in the US are so disconcerting. There is no sugarcoating the immense risk. Donald Trump has said he would withdraw support from Ukraine. This would embolden Putin, cause a crisis of confidence within NATO, and cause shock waves through the foreign ministries in Seoul, Tokyo, and Canberra. If Trump wins the 2024 election, it would not come as a surprise if the president of Poland, the president of Taiwan, and the prime ministers of Japan and Australia immediately begin discussions with Britain and France to acquire nuclear weapons from them on an expedited basis.
In a perfect world, American isolationism is an option. In the wildly imperfect world that actually exists, where autocrats constantly strive to expand their physical and digital spheres of empire and oppression, American isolationism cannot become an option. In the early 1920s, after a terrible World War I, America retreated back to the Western Hemisphere and refused to join the League of Nations, not wanting to get entangled in “old world” conflicts anymore. America’s departure from the world stage virtually ensured an even bloodier World War II. Thankfully, America decided to help build a world governed by a rules-based international order after World War II. The result (helped along by deterrence afforded by nuclear weapons, to be sure) has been a lasting peace among the great powers since then. It would be absolute folly for the Republican Party to try again the 1920s geopolitical strategy of isolation, especially when the world is in the midst of Cold War 2.0. Americans need to do the right thing on November 5, 2024, not just for the other democracies of the world, but for themselves.
What about Europe taking more responsibility for its own defense? Perhaps one day during Cold War 2.0, but certainly not for the next few years. The British, who now understand the threat from the autocracies very well, self-immolated when they Brexited out of the European Union. (It is estimated Great Britain lost between 1.2 and 4.5 percent of their GDP since they left the EU.) Plus, for years they not only tolerated Russian oligarchs in “Londongrad”; they positively encouraged them to come and settle there. To be sure, since Russia’s full-scale invasion of Ukraine the British have tightened their rules about Russian oligarchs buying up British assets, including football (soccer) clubs, but a lot of damage has already been done.
The Germans for decades also wore rose-colored glasses about the Russians, building not one but two gas pipelines from Russia, causing them and many others in Europe to become overly reliant on energy from the autocratic nation. The Americans warned them, and the Germans steadfastly ignored the warnings. On February 24, 2022, when Russia invaded Ukraine, the Germans were in shock. Thankfully, though, the scales have now fallen from the eyes of the Germans, and they are plowing serious tens of new billions of euros into defense. Nevertheless, it will take a number of years before Germany is ready to defend itself, let alone meaningfully help in the overall defense of Europe.
As for the French, they certainly have the military muscle. They are a nuclear-armed state—one of only two in Europe, the other being Britain. And France is part of NATO, but they like to walk a fairly idiosyncratic path. In the 1960s they were angry with the Americans and pulled out of the integrated command of NATO for a few years. Soon after Putin’s invasion, France’s president Emmanuel Macron made a trip to Moscow to see if a deal could be done with Putin. Putin sent him packing. In April 2023 Macron made a trip to Beijing to see if he could get Xi to bring Putin to his senses. Xi sent Macron packing, but not before Macron sold a bunch more Airbus planes to the Chinese. Which prompted Macron to tell a reporter on the way back to Paris that the Europeans would not support the Americans in their defense of Taiwan. So, the answer to the question “Can the Europeans defend themselves yet?” has to be a resounding no. For the foreseeable future the US is the indispensable military anchor of NATO. Period. This is simply one of the truths governing relations in Cold War 2.0 for the next decade or so.
Before turning to what a technologically decoupled world will look like (indeed, is already looking like), it is worth recalling why Cold War 2.0 requires such a technology bifurcation in the first place. There are two main reasons. First, it has been the sensible policy of the democracies not to sell weapons and munitions to autocracies that are hostile to the democracies. This is done so that the democracies never face a situation where autocracies use weapons made in the democracies against those very democracies. Call this a policy of straightforward self-preservation. What has evolved in this policy over the decades, though, is that computer-based technologies are increasingly being embedded into weapons systems. (Recall the “dual-use” discussion, where the same high-tech device can be used for civilian or military purposes.) Therefore, the democracies currently don’t just block the sale to autocracies of weapons, but also of technologies that could be integrated into weapons by the autocracies. And still some deals along these lines get through the multiple regulatory screens, as when it came to light in June 2023 that a university professor in Britain was helping an Iranian scientist with research on drones. (Remember that Iran has sold Russia hundreds of drones that have then all been launched against targets in Ukraine.) It is precisely this sort of behavior in the democracies that the export ban on weapons and dual-use technologies (and technological know-how) is intended to curtail.
The second reason for democracies decoupling technologically from the autocracies is that autocracies make intensive use of high-tech goods to oppress their citizens. China in particular has developed a number of tech products that implement continuous, intrusive, and relentless surveillance of Chinese citizens—especially the 13 million in the Uighur community in Xinjiang—using facial recognition software, DNA testing kits, video recordings along every inch of many streets, voice recordings made from telephone calls, and all forms of digital messages. All of this material is then analyzed, sorted, and processed in real time by massive supercomputers so that authoritarian tactics can be used, and oppressive punishments inflicted, upon wholly innocent people. In light of this behavior by the Chinese government, the democracies have decided to block the export of any technologies that China could integrate into these systems of mass surveillance and oppression. Bottom line: the democracies don’t want to be implicated in this sort of inhumane technology model that completely violates the human rights of privacy and dignity as set out in the United Nations Universal Declaration of Human Rights, a document that is binding on all members of the UN, including China and Russia. Moreover, having perfected this grotesque system of digital citizen surveillance and oppression, China sold has sold such systems to some sixty other eager autocracies around the world. China is the leader by far in technology with nefarious autocratic characteristics.
Furthermore—with respect to the question “Why technological decoupling?”—it is important to recall that the Chinese have been decoupling technologically from the democracies for decades. Soon after the Internet came on the scene, China built the so-called Great Firewall of China, which in electronic form tries, and usually succeeds, in replicating the ancient physical Great Wall built across large swaths of Chinese northern territory centuries ago in order to keep attackers out of the country. This is why a typical computer or smartphone user in China cannot access Google, Facebook, or a number of other American Internet services. Equally, the Chinese government has cut off entire domains of economic and social activity from investment by people and companies residing in the democracies. Therefore, while it sounds childish, when the question “Why should the democracies decouple from China technologically?” is posed, a partial answer is “China long ago started the technology decoupling! The democracies are just taking to a logical conclusion a process started by the Chinese.” Therefore, the Chinese should not be up in arms that TikTok may one day be banned from the US, given that similar American services have been banned from China.
It should also be noted, along this same vector, that China is far from done decoupling from the democracies. China wants to decouple from quite a lot of the networks and systems put in place by the global community. China strives desperately to get off the US dollar as the world’s reserve and payments currency; it requires more of its counterparties to pay in Chinese renminbi—including telling (not asking) Russia to take renminbi in payment for Russian oil and gas shipped to China. China would also dearly love to replace the SWIFT (Society for Worldwide Interbank Financial Telecommunication) financial payments system with a Chinese version. China is also concerned that many of the fiber-optic communications cables that stitch the world’s countries together are owned and operated by companies in democracies, and therefore their national security organizations can tap these cables to monitor data and voice conversations. The Chinese are already putting their own communications satellites into orbit so that they don’t have to rely on ones operated by the democracies. Technical decoupling is not a new thing; it’s just becoming more urgent given Cold War 2.0.
Two overarching thoughts about technological decoupling are worth keeping in mind at all times. First, doing it will be fiendishly difficult. The degree of intertwining of the Chinese economy with those of the major democracies is so extensive that unraveling the two, even partially, will be a complex and arduous task. That’s why it’s important to remind businesses and others in democracies (as in the previous paragraphs) of the rationale for doing it when phases of the process prove to be extremely challenging and expensive.
The second general point pertains to nomenclature. The Americans started using the word “decoupling,” and it spooked a lot of people. The Europeans have countered with the word “de-risking.” At the G7 meeting in May 2023 the Americans tried to win some points with the Europeans by dropping “decoupling” and switching to “de-risking,” another example of the Biden administration’s alliance-maintenance skills being second to none.
The best phrase, however, is “technological decoupling,” for several reasons. “De-risking” lacks urgency. Prudent commercial actors will always be looking to reduce risk in their dealings, so the word “de-risking” just labels a best practice that presumably has been happening in global business for decades. It does not inspire or prod companies and governments to go beyond “business as usual” thinking and action.
“De-coupling” alone, though, while it conveys the right degree of seriousness, if left unqualified is overly broad. Hence the right balance is achieved with the phrase “technological decoupling.” It’s still urgent, but also limited to the pinnacles of technology and some other assets necessary for tech-related activities (such as rare earth exploration, mining, and processing). As such, “technological decoupling” is better suited to an era of Cold War 2.0 that is driven by digital and other hyper-innovative processes.
The focus of the tech decoupling contemplated by the democracies will be products that comprise or include the four accelerator technologies. The US government should block the export of these items to China under sanctions laws, resembling the kind of sanctions passed in October 2022 to prevent the shipment of high-end SCs to China. In addition, though, it can be expected that the US also eventually passes a law preventing American investors from putting money into Chinese companies involved in these technologies, and American university professors will be barred from collaborating with Chinese counterparts in the areas of these technologies.
Most products, though, traded between the democracies and the autocracies will not be impacted by these sanctions; that is, roughly two-thirds to three-quarters of products from China will remain unaffected by such sanctions. For example, the hundreds of goods that can be purchased in a Walmart that are made in China will not be impacted by the technology decoupling, subject to one very significant exception. China might undertake some behavior so egregious that the democracies decide they need to prevent all trade between themselves and China. This is exactly what the democracies did when Russia launched its invasion of Ukraine in 2022. Therefore, if China were to attack Taiwan, many democracies will likely sanction all trade between those democracies and China. In that case, even low-tech goods would be caught in the embargo, as China will assume the status of a pariah state.
Consider the following scenario. China attacks Taiwan. The US comes to the defense of Taiwan, as the Biden administration has said it would. This means not only that the US provides weapons to Taiwan (as it did to Ukraine), but also that US soldiers actively participate in the fight against China, which the US did not do against Russia in the Russo-Ukrainian War.
Within a few days of after the prospective Chinese attack against Taiwan, a Chinese missile strike on a US aircraft carrier in the Pacific is successful—just as a Ukrainian cruise missile sank the Moskva, Russia’s leading ship in the Black Sea—and 350 American sailors die in the attack. The gruesome videos of death and destruction from the disabled ship circulate all over American social media. Some weeks later the body bags containing slain young American men and women begin arriving back in small towns across the United States. If after this attack Tesla continues to make cars in its factory in China, and Tesla continues to sell its cars from its showrooms in China, there is a very strong likelihood that not a single Tesla car will be sold in America for the duration of the Taiwan War and for months, perhaps years, afterward. Moreover, when the first American missiles take out a Chinese warship, and 350 young Chinese sailors die, it is likely that no Chinese consumer will thereafter buy a Tesla—and those who own Teslas in China will likely be too worried to drive them anymore, given that mobs of Chinese nationalists had already torched Tesla’s showrooms. Social media in both America and China would have implemented the most far-reaching trade embargo in human history.
Elon Musk, Tesla’s boss (and the world’s richest person), is hoping that such a scenario never comes to pass. He was in China in June 2023 telling his hosts that China and the US were “conjoined twins” with commercial interests that are completely aligned.2 This may well be, but Beijing behaves as if its desire to take over Taiwan trumps its economic relationship with America. It is also interesting to see the Chinese use Musk’s visit to trumpet how open Beijing is to foreign investors when Musk’s Twitter company is not allowed to do business in China and neither is Musk’s Starlink satellite business, because both offend China’s restrictive policies of censorship and complete social control. And it was fascinating how Musk, perhaps the most outspoken business executive in the world, is not so much when he is in China—he did not dare post a single tweet while he was in China, lest he upset his hosts. It’s easy being for free speech when you’re in America, the bastion of free speech in the world; true character and courage are better judged when you support free speech where the government is an autocracy. Musk failed this test miserably.
Musk is not alone. Starbucks CEO Laxman Narasimhan was also in China in the spring of 2023, proclaiming that he would like Starbucks to grow to 9,000 outlets in China from 6,000 today. Fair enough, but those plans will be dashed if the US supports Taiwan militarily in defending the island nation from a Chinese attack, because mobs of Chinese will likely destroy every Starbucks outlet they can get their hands on. This isn’t simply conjecture. Recall the social media outrage against Swedish clothing retailer H&M in 2021 when H&M was critical of Chinese labor practices in Xinjiang, and the Chinese government unleashed the Communist Party youth wing against H&M.3 A hot war over Taiwan, where Chinese soldiers are dying because of American missiles fired from American naval vessels, aircraft, and land bases in Guam, Okinawa, and the Philippines, would be a much worse scenario. Chinese social media outrage would inevitably spill over into the physical world, and American-owned retail outlets in China would be the obvious target.
To prepare proactively in case of such a scenario, companies in the democracies can be expected to reorganize their supply chains in order to mitigate their potential risk. Assume an American furniture retailer has an important supplier in China that manufactures 80 percent of all the furniture they sell in the United States. They would be prudent, at a minimum, to contract with another supplier as a second source of products, perhaps a factory in Mexico. That way, if its China supply is blocked at some point, it can have the Mexican plant keep producing and ideally increase its production to make up for the lost production from the Chinese factory. Or it may opt for a second source factory in Mexico and a third source factory in Vietnam. The key objective is to diversify, or “de-risk,” supply chains from non-tech goods to be ready for any contingency. Even in the tech space, Apple is implementing such de-risking by having Foxconn, its major assembler of iPhones in China, shift some production to India, and a lesser amount to Vietnam as well. Better safe than sorry, even if this strategy will cost more in the short to medium term.
As for retail outlets like Starbucks or Tesla dealerships, they need to have contingency plans for responding to extreme blowback in the Chinese market. It might be that the Chinese government keeps a lid on protest and consumer reaction, but if things do turn ugly (particularly where the Chinese government pushes consumers in that direction), these and similarly placed companies need contingency plans to deal with worst-case scenarios. Ideally the companies created these plans some time ago, as just another cost of doing business in the world’s largest consumer market. And presumably the profits from such businesses are significant enough that even if a complete exit from the market is the ultimate result (due to a hot war over Taiwan), the companies still made sufficient rate of return on their (albeit truncated) investment while the going was good.
As for the tech goods from the democracies that will no longer be traded with the autocracies due to tech developing, they will become more “democracy friendly” than the equivalent goods made in the autocracies. For instance, facial recognition technology made in the democracies will have many more controls against possible abuse by unscrupulous system operators or hackers who penetrate the system. They will have much stronger security features than the equivalent products emanating from the autocracies. In short, they will be built to the “standards of democracy.” And presumably they will be used by governments and businesses in democracies in a manner very different than in autocratic China, but this remains to be seen.
Trade relationships between democracies and nonaligned countries will be similar in one respect to those between democracies and autocracies. Low-tech goods, including agricultural products, processed foodstuffs, and the thousands of items found in a Walmart, will all pass both ways across borders with little concern (except, as noted above, in case of the general trade embargo following a Chinese attack on Taiwan). Trade in technology products will have a different and much more nuanced strategy, as between democracies and nonaligned countries. Nonaligned countries that are democracies will presumably want to acquire high-technology products only from other democracies because they will be made in accordance with the “standards of democracy.”
On the other hand, the nonaligned country, even a long-standing democracy, will not like the idea of getting locked into a long-term technology supply arrangement with any country, whether it is an autocracy or democracy, if it can avoid it. In order to remain attractive as a trading partner to the autocratic camp, the nonaligned country will not want to be perceived as too close to the democracy camp. The autocracies may even make their continued purchases of large volumes of commodities from the nonaligned country contingent on the nonaligned country buying certain types of high-tech goods from the autocracy. If these types of tech goods do not comport to the nonaligned country’s norms of democracy, a fairly important impediment will arise between these two potential trading nations. Democracies that can assist nonaligned countries navigate these difficult shoals of global trade policy will be well received in the capitals of the nonaligned; those that cannot thread these delicate needles will lose market share among the nonaligned. Some nonaligned countries will try to make more of their technology goods, as India is doing with some of its digital identity and payment systems software.4
One area of “partial decoupling” that will be particularly fraught concerns the situation where services (rather than goods) are supplied from an entity in an autocracy to customers in a democracy (including a nonaligned democracy). The case of TikTok is illustrative. TikTok is a hugely popular app, particularly among teenagers (and even tweens). It has some 150 million users in the United States. What complicates matters is that it is owned by a Chinese company, and the video sharing/streaming service collects personal data from users. A core problem arises because under Chinese law, the Chinese government has the right to access all user data collected by companies like TikTok. TikTok says it has never been asked by Beijing to give up customer data, but of course that doesn’t mean Beijing couldn’t exercise its right of access tomorrow.
No democracy should allow a digital (or any other) service to collect personal data from its citizens if there is a risk of that personal data being shared with a foreign government. One solution for the TikTok situation is for the Chinese owner of TikTok simply to divest the American TikTok business to a non-Chinese buyer, presumably an American company. This idea is attractive because it is a neat and tidy solution. In effect, companies in autocracies should not be entitled to operate businesses in the democracies where data from consumers in the democracy either flows back to the autocracy in the ordinary course of daily operations, or the company ultimately has to transfer such data to the autocratic government at the government’s request. Indeed, a lot of tech decoupling has already gone on in this regard in terms of the big Internet companies, with the impetus for decoupling coming from the autocracies. This is why Google and Facebook, as noted above, are unavailable to consumers in China. Therefore, so long as ByteDance owns TikTok, governments in the democracies should ensure the service is not made available to consumers in the democracies. Such a restriction would simply be a reciprocal limitation similar to the one China has for decades levied on American suppliers of digital services.
This doesn’t mean all foreign investment by Chinese firms in democracies should be prohibited, just as there are a lot of entities in the democracies that are permitted to invest in Chinese businesses—though all these businesses have greater risk now that there could be a wholesale embargo on trade between their respective countries, in which case the foreign investor will face the major hurdle of pulling out of the other’s market. On the other hand, Chinese companies should not be able to invest in companies in a democracy that make high-end tech products in the domains of the four accelerator technologies, and even investments in the less sensitive, but still important, industries listed in chapter 9 need to be reviewed carefully by governments in the democracies.
Technological decoupling, as part of Cold War 2.0, is a structural solution to the risk posed by autocracies to the democracies in the globalized era defined by high tech. In addition to dealing with the problems posed by technology, however, it should not be forgotten that the democracies must also respond to certain low-tech behaviors of the autocracies that are also unacceptable. When an autocracy exercises economic coercion against a democracy—or China conducts or condones cyberattacks against entities in democracies, or attempts to influence lawmakers in democracies through intimidation—ideally the entire community of democracies will respond in the manner outlined in chapter 12, with a collective response that is muscular and economically proportionate. Most important, the democracies must act in unison; otherwise, the massive economic leverage of China will prevail relative to any single democracy (perhaps with the exception of the US). The democracies must remember the admonition: “none of us is as strong as all of us.” This is extremely useful advice when the democracies consider how to respond to economic threats (let alone political or military ones) from the large autocracies, especially China.
Within the world’s autocracies it is clear that for the foreseeable future only China will be able to innovate meaningful new technologies on a sustained basis. There will be, therefore, an ongoing continual tightening of the economic orbits of all autocratic countries around China. This is already happening even between Russia and China, partly as a function of the economic sanctions levied on Russia by the democracies as a result of Russia’ invasion of Ukraine. It is an open question whether Russia, once the Ukraine War is over, will continue to accept its new role as junior partner to China. Recall that in Cold War 1 the roles were very much reversed; plus, in the 1960s Russia and China experienced a schism, and even a low-grade military conflict along their mutual border. Will Russia be content to play second fiddle to China for the balance of Cold War 2.0?
Still, while Russia is a much smaller country than China in terms of its economy and population, Russia nevertheless punches above its weight on the world scene because for the last twenty-five years its autocrat, Vladimir Putin, has liked to punch. Putin has absolutely no hesitation to put young Russian men in harm’s way, so long as their deaths and maiming advance his vision of a restored Russian Empire—recreated under Tsar Putin, who earns fabulous wealth from this enterprise, of course. This is the major reason why Putin has been so successful in military terms, at least up to his invasion of Ukraine. Most citizens in the democracies no longer find it acceptable to have soldiers come back from a war zone in body bags unless the war was genuinely unavoidable and very limited in scope and duration. Presidents of the United States and leaders in many other democracies have learned the lessons of Afghanistan and Iraq, and have deployed boots on the ground very sparingly ever since. Russia, by contrast, has no reservations, and it also uses private mercenary groups aligned to the Russian government, like the Wagner Group, to carry out military and security missions in places like Africa, so that these soldiers (almost all being ex–Russian military) can undertake distasteful missions that even Putin doesn’t want to be associated with in the global press. These mercenary forays into the Global South in support of local autocracies are also extremely lucrative, both for the mercenary group and for Putin, as they often take payment in the commodities produced by the facilities they are protecting, such as gold mines.
Although China will be the leading technology innovator of the autocracies, technological progress there will invariably fall behind what is achieved in the democracies (led by the United States), given the lead in innovation built up by researchers and companies in the democracies over the past fifty years. Over the coming decades, as the accelerator technologies speed innovation in the democracies across all domains of the economy and the military, the deficiencies inherent in the Chinese top-down tech industrial strategy model will become visible for all to see. Ultimately, falling behind the democracies may lead Xi to consider whether it makes sense to attack Taiwan sooner than later—but it might also lead Xi, or more likely Xi’s successor, to propose a “grand bargain” whereby China gives up its claim to Taiwan, and in return the democracies drop all trade embargoes.
Given that China will be tasked with innovating the bulk of technology used by the autocracies going forward, it is useful to ask whether China will continue to allow hundreds of thousands of China’s best young minds, especially in the STEM disciplines, to leave China to study in the democracies, principally for graduate degrees in the STEM subjects. Of these students, about 80 percent return to China, but that means tens of thousands stay in the democracies. Will a Cold War 2.0 global innovation model allow this brain drain from China to continue? And if China wants to stem this emigration, presumably it will have to offer its homegrown talent compelling opportunities and lucrative employment to stay put in China. This will put a strain on the Chinese economic system. The lure of California’s Silicon Valley for young engineers is great, as they want to work on the coolest tech going and make a small fortune along the way. If this dual opportunity is not available to them in China, but at the same time they cannot emigrate to a democracy, the resulting tension inside China will grow. Will Cold War 2.0 (with its tighter controls on technology and people flowing between the two camps) lead inevitably to a Tiananmen Square 2? This is one very significant risk factor worth watching for in a technologically decoupled world.
The converse of this issue for the democracies is this: even if China continues to allow its best and brightest STEM students to study in the democracies, should the democracies continue to take them in? On the one hand, a very high-performing 20 percent will stay in the democracy and contribute materially to the technological progress of the democracies. On the other hand, the 80 percent that return to China pose some security risk in that they may well have had access to information and material that the democracies would prefer not to share with the autocracies. This second risk can be managed, though, through some prudent oversight of university graduate students from autocracies.
The main question, then, in allowing so many fine grad students to study, and then stay, in the democracies, is whether the democracies are thereby depriving the autocracies of just the type of minds that, if they remained in the autocracy, would very well be leaders of the revolution in favor of democracy. Put another way, how can the democracies reasonably expect a Tiananmen Square 2 freedom movement (but this time with more success) if the democracies siphon off the crème of the student population. Put in these terms, the immigration policy that favors bringing to democracies the world’s best and brightest from the autocracies is somewhat selfish and shortsighted.
The principal nonaligned countries that are democracies are listed in Table 4 of chapter 10. In the aggregate they have a population of 2.717 billion people (but a combined GDP of only $8.27 trillion). Nevertheless, the nonaligned countries will be able to punch above their economic weight because both the democracies and the autocracies will be wooing them furiously during Cold War 2.0. China, in particular, will absolutely require the natural resources and foodstuffs grown by the nonaligned countries, in particular those of Brazil, South Africa, and Mozambique. For their part, the democracies will keep reminding the major nonaligned democracies that, at the end of the day, they are democracies themselves.
Blood, however, will not often be thicker than water in this relationship between aligned and nonaligned democracies. The nonaligned countries will invariably purchase a great deal of technology from the democracies, and in return they will want to export a lot of products to the democracies, but in terms of overall economic value, a country like Brazil earns much more from its sales to autocratic China than it does to all the democracies combined. Consider these statistics: Brazil’s five leading exports in 2022 were iron ore ($46.2 billion), soybeans ($39 B), crude petroleum ($30.7 B), raw sugar ($10 B), and poultry ($7.6 B), while its five leading export markets were China ($88.3 billion), the United States ($30.2 B), Argentina ($12 B), Netherlands ($9.3 B), and Chile ($7.1 B). The hearts of the nonaligned democracies might be in the camp of the democracies, but their heads are certainly engaged with the autocrats.
The nonaligned countries, though, need modern weapons systems. They are nonaligned, but they are certainly not immune from regional security risks, and they all tend to be in very rough neighborhoods. Take India, for instance. It is certainly in a difficult region in terms of security challenges. Table 15 in chapter 9, though, reveals that India has only two small weapons manufacturers, and the other nonaligned countries have none. Therefore, whichever arms manufacturer India (and others among the nonaligned) buys from creates a long period of tech dependency on a foreign power, up to thirty years for a complex system like a modern jet fighter, but even twenty years for a state-of-the-art tank. Which camp they choose such strategic technology from may in effect cancel their nonaligned status, at least for military preparedness purposes. In today’s technologically infused world, maintaining nonaligned status is not a simple exercise.
Several nonaligned countries will play important roles in Cold War 2.0, in particular India, Brazil, and South Africa. India, though, will be extremely important. With China’s population shrinking, India is now the world’s most populous country (though this fact alone can be a blessing or a curse). It is also a democracy, though some of the nationalist, sectarian programs of Prime Minister Narendra Modi reflect a somewhat autocratic bent. Economically speaking, there has long been a sense that India’s full potential in the domains of manufacturing, finance, and commerce is being thwarted by very cumbersome bureaucratic government procedures, and in some cases by state-fueled corruption. Modi, however, is clearly signaling that he wants India to move up the value chain in advanced manufacturing, and he is working hard to attract iPhone assembler Foxconn5 to India; he is even taking a stab at establishing a semiconductor chip (SC) manufacturing plant.6
India has had some meaningful success in the information technology outsourcing domain. Companies like Infosys, Wipro, Tata Consultancy Services, and Cognizant have modern computer-equipped campuses in Bangalore, Chennai, and Pune that would not be out of place in Silicon Valley. These companies, though, should not be mistaken for what they are not. They don’t produce world-class innovation and constantly release new products and services like AWS, Microsoft, and Google. Which is one of the reasons there continues to be a massive flow of India’s best and brightest STEM university graduates to the US, Canada, the UK, and a number of other democracies. This Indian diaspora has done very well for themselves, and for the new countries they now call home. As noted in the introduction, hundreds of CEOs of North American tech companies were born in India, including the current CEOs at Google, Microsoft, and IBM. India has also fairly recently implemented a digital ID system, to which they then added payments and other features; India is now selling this successful “Made in India” technology to other members of the Global South.
Nevertheless, a review of the league tables in the four accelerator technologies and the other important technologies confirms that India is still a net importer of innovation. Indeed, today 70 percent of the weapons systems used by India’s air force were designed in Russia, and a whopping 90 percent of the weapons systems used by India’s army were sourced from Russia. With this sort of reliance on Russia, can one even meaningfully talk about India as “nonaligned”? Recently India has been warming up to the United States in order to counterbalance the serious threat India sees from China—and yet India still purchased its new antimissile system from Russia (the S-400), rather than procure the Patriot system from the US, much to the consternation of the Americans.
At the same time, though, India has discomfort about Russia’s increasing dependence on China because, as noted above, India is very nervous about China. India and China share a disputed border, and in 1962 they fought a war over that border, a war that India lost in a humiliating manner. They had a skirmish along the contested frontier as recently as December 2022, but without any deaths as they have an agreement not to allow weapons into the area. Moreover, India’s ongoing distrust of China has led India to join the Quad, a loose strategic security dialogue group made up of the United States, Japan, Australia, and India, focused on countering China’s aggressive tactics in the Indo-Pacific region. The Quad also undertakes the largest joint military exercises in the region. India is also a member of the I2U2, a group somewhat similar to the Quad but comprising India, Israel, the United Arab Emirates, and the United States. And on the military technology front, India has just recently agreed to buy fighter jets from France, and engines for fighter jets from an American company, with the happy blessing of the American government. Clearly India’s military procurement plans are in a state of flux.
At the same time, though, when Russian energy sales to Europe were phased out by the Europeans in 2022 in response to the invasion of Ukraine, India agreed to buy much of Russia’s oil, which was previously being sold to the Europeans. (In 2022, India’s imports from Russia rose 400 percent.) Again, the Americans were perturbed and the Ukrainians were livid. In Cold War 2.0, the democracies will find managing their relations with the nonaligned countries a challenge, if India is any indication. During cold wars, the world becomes bipolar in terms of geopolitics. From the perspective of the nonaligned countries, bipolarity gives them options and opportunities, particularly because they have weak technology innovation capabilities. They are, when all is said and done, nonaligned as a matter of choice, not chance. Notwithstanding their challenges, the democracies have a reasonably good hand to play vis-à-vis the nonaligned, but again it is one best played when the major democracies deploy their cards in a somewhat coordinated fashion.
Some commentators argue that even if relations between China and the United States become fraught, as would certainly be the case in a full-blown Cold War 2.0 world, there will still be plenty of scope for them, their allies, and their partners to collaborate on internationally relevant projects where it is clearly in the interests of the entire global community. Issues that fall into this domain of potential cooperation include climate change, combating terrorism, pandemic preparedness, food security, regulation of the high seas, nuclear arms controls, international crime, and illicit drugs—and this is just a partial list.
In theory there is no reason why countries in a generally partially technologically decoupled world couldn’t cooperate on noncontentious matters that benefit them all. At least that’s the theory. In the real world, though, with technology underpinning virtually all pressing global issues, and technology being the very sensitive linchpin matter between democracies and autocracies, there will indeed be some very difficult challenges confronting cooperation across the camps.
Suppose the United States invents a new battery technology that absolutely revolutionizes electricity storage, a device desperately required for renewable energy from solar and wind power to work at scale on major national electricity grids. This innovation could seriously move the dial on combating climate change. The US offers China a license for the technology, but would China accept it? What if there is a subsequent embargo against China using any technology from the US because of a dispute over Taiwan? Even if there isn’t that problem, will China be willing to be beholden to the US for a long time for updates to the technology? All told, it’s much easier for China to simply go about building its own batteries, even if they’re not quite as good as the new one from the US. Then there’s the question of China losing face in the global community, especially among the nonaligned countries, if it uses technology from the democracies. Recall that China is still not buying mRNA COVID vaccines from the democracies even though they have proven far superior to the (non-mRNA) ones made in China.
Another area urgently calling out for cooperation among the US, Russia, and China is putting some limits and processes around nuclear weapons. There is solid precedence for this between the US and Russia between the early 1970s and the late 2010s. Over that period, this form of international cooperation, even during the height of Cold War 1, made progress between the two nuclear superpowers. After the US and Soviet Russia came fairly close to an exchange of nuclear weapons during the Cuban Missile Crisis in 1963, negotiators from both governments began discussions about placing limits on their respective nuclear arsenals. The result was the signing by the US and Soviet Russia of the Strategic Arms Limitation Talks in 1972. Other treaties followed, dealing with nuclear nonproliferation, nuclear weapons testing, and intermediate-range nuclear weapons.
Then, after Russia annexed Crimea in 2014, nuclear weapons discussions between the US and Russia came to a halt, and one after another the various treaties between them expired without renewal, or one side or the other pulled out of them. Currently only one treaty still is in force. The atmosphere for negotiations has not been improved by the fact that Russia has not been able to prevail over Ukraine in the war launched by Putin, largely because of the high-tech weapons provided to Ukraine by America and other democracies. In short, it is not a very propitious moment to resume negotiations on nuclear weapons treaties, particularly as the US will want to add China’s nuclear weapons to the mix, as it certainly makes sense for the US to treat the two autocracies together when tackling the finicky question of nuclear weapons control. Again, as with climate change, the players intellectually know what needs to be done, but there is simply precious little goodwill among them to get a meaningful deal done. Cold War 2.0 could very well be a lean period for negotiating and concluding such international arrangements.
A final question on democracy/autocracy cooperation concerns international sports competitions, such as the Olympic Games and the football World Cup. The privilege to host these major sporting events, or to sponsor a golf league like the PGA, should never be awarded to autocracies. Russia made a mockery of the Olympics when it hosted the 2014 Winter Games at Sochi. First, the government ran the most elaborate and extensive illegal doping system ever conceived for an international competition, including secret compartments cut into the walls where samples were collected from Russian athletes so they could pass illegal substitutes to the testers. And then, mindful that one major purpose for such sporting competitions is to bring the world together in peace and harmony, within two weeks of the final ceremony at Sochi, Putin invaded Ukraine and annexed Crimea illegally. Eight years later, Putin traveled to Beijing to meet with Xi as the 2022 Olympics are wrapping up in China—and then two weeks later Putin launched his full-scale invasion of Ukraine. Again, autocrats simply don`t care about the true meaning of sporting events such as the Olympic Games and World Cup football (soccer) matches; their only interest in these globally important events is to try to scrape together some patina of legitimacy for themselves and their people.
Whether athletes from autocracies should be entitled to participate in such international competitions hosted in democracies is addressed in chapter 12. Here, the point is that autocracies should never be allowed to host them. For example, Saudi Arabia desperately wants to host the 2030 football World Cup. The Saudis also want to “sportswash” their autocratic behavior by, for example, buying off professional golfers with huge sums of money, thereby allowing the Saudis to host the PGA as their own, in effect. The response to the Saudis should be a resolute “no” on both counts.
These are sporting events that were first established in democracies, and the democracies therefore should “repatriate them” and once again make them their own, exclusively. Moreover, they would have an easier time making a “clean version” of the decoupled games competitions, for the simple reason that the most prolific cheaters (when it comes to doping), namely the Russians, will be eliminated from the version of the games that caters only to participants from democracies.
Of course the autocracies might host their own versions of these competitions. They would have to be held in their own countries, and presumably athletes from the democracies could attend them in their individual capacities, presumably something attractive to them because the organizers will offer enormous cash prizes to the athletes who do well. They could be marketed as the “Money Games.” Presumably the sums involved would be high enough that many (most?) athletes from the democracies who would compete would be willing to undergo a doping regimen, like their counterparts in the autocracies, notwithstanding the adverse impact on their health in the longer term. In effect, another tech decoupling would be achieved—a clean form of sport with reasonable compensation in the democracies, or a dope-filled competition for lots of money in the autocracies. Sadly, the latter will likely get higher television ratings, even in the democracies.
Incidentally, the cultural decoupling that this proposal about sports events would represent was started, in a fashion, by the autocracies. In 1970 the Russian author Aleksandr Solzhenitsyn was awarded the Nobel Prize for Literature for his book The Gulag Archipelago. He did not attend the award ceremony because the Russian government made it clear it was very unhappy with his winning the prize, given that the book described in detail the forced labor camps in Siberia run by the Russian government. Similarly, in 2010 China slapped a partial trade embargo on Norway for six years because the Nobel Committee awarded the Nobel Peace Prize to Chinese dissident Liu Xiaobo, who was languishing in a Chinese jail. A bifurcated world of sporting competitions would fit nicely into this cultural decoupling paradigm, and would be wholly consistent with Cold War 2.0 trends.
The final question worth asking about Cold War 2.0 is “How long will this technology bifurcated global system continue?” This is a natural question because wars tend to come to an end. Cold War 1 certainly terminated when the East Bloc countries left the orbit of Soviet Russia in 1989, an ending further confirmed a couple of years later when Soviet Russia itself collapsed. This was such a momentous culmination that a leading historian even ventured the thought that history had ended, in the sense that the contest of political systems was over and the clear winner was democracy.7
Could there be such a determinative end to Cold War 2.0? There is certainly precedent for an autocracy to make the transition to democracy and responsible membership in the international community. Germany and Japan were the leading warmongering autocracies in the first half of the 20th century. After World War II, with some coaching, direction, and much economic subvention from the democracies, both nations became democracies themselves, to the point where today it is inconceivable that either will revert to autocratic ways. Both Germany and Japan have also learned that commercial and financial success don’t actually require physical colonies, and that financial trading is more effective than military raiding. Japan is the third-largest economy in the world, while Germany is the third-largest exporter in the world. Both have done fabulously well throwing their lot in with the democracies.
There is plenty of precedent, therefore, for a country making the transformation from autocracy to democracy. Many other countries (besides Germany and Japan) have taken the same transformative path (think Italy, Spain, Portugal, South Korea, or Taiwan, to name a few).
In effect, what would it take for Russia and China to become democracies? There are two scenarios. In one, the current Cold War 2.0 technology/innovation gap in favor of the democracies over the autocracies, grows steadily over time. Starved of the fruits of innovation emanating from the democracies, Russia and China try to keep up to the democracies, but inevitably their relative pace of innovation decreases, and their standard of living compared to the democracies declines commensurately, gradually in the short term, and then significantly in the midterm. Eventually, the gap becomes a chasm obvious for all to see (including their own populations), as both Russia and China become, in essence, large North Koreas.
What the populations of Russia and China see is that the cure for cancer, dementia, drug dependency, and diabetes are developed in the democracies; completely clean fusion energy is made to work in the democracies; aircraft in the democracies run on nonpolluting aviation fuel; wheat that can withstand blistering heat is grown in the democracies; and the democracies collectively launch the first crewed mission to Mars. In twenty years, when both Putin and Xi step down, the new leaders of Russia and China could craft a transformation not unlike what Deng Xiaoping accomplished when he succeeded Mao and what Boris Yeltsin did when he came after Gorbachev—except this time the successors of Putin and Xi transform both the economy and politics, and bring real democracy to Moscow and Beijing. Cold War 2.0 would be over.
The second scenario essentially plays out like the first, with one major difference. China, prompted by the forecast of its future decline, makes a grab for Taiwan and attacks the island nation. Ironically, just as the Russian full-scale invasion of Ukraine steeled the democracies against Putin, Xi’s reckless war against Taiwan and the US further galvanizes the democracies. Whether Xi is actually able to conquer Taiwan or not, the net effect of his act of hubris is that the isolation of China, and Russia, becomes more complete than under scenario 1, with the result that the two leading autocracies become large North Koreas even sooner. The unintended result is that regime change in both countries is hastened; democracy comes to them in a decade rather than in a twenty-year timeframe.
Obviously such predictions, complete with timelines, are subject to many conditions and inevitable twists and turns in possible permutations. Still, one indispensable requirement for the democracies to prevail over the autocracies is as certain as night follows day: the democracies will only win Cold War 2.0 if they all continue to move forward together under the leadership of the United States, but their success is assured if they continue to increase their cooperation and joint action on a host of fronts, including technology innovation and military preparedness.
Therefore, the most serious threat to these two scenarios becoming reality is if sometime over the coming decade someone became president of the United States who led that country to an isolationist retreat from Europe and Asia. That scenario ends in catastrophe for the democracies, including the United States.