The New Cold War is not a forecast. It’s here and now. Where the conflict takes us does need forecasting, however. For our destination I shall set out some scenarios for you to choose from. But first a bit of history.

We had a few misconceptions in 1989, when we welcomed the ‘end of history’, meaning the end of systemic confrontation between hegemonic great powers, after the Berlin Wall fell. And also in 2001, when we invited China to participate in the free world economy by joining the WTO. The idea was that the richer China got, the more Chinese society would become like us, espousing our democratic niceties. China actually became more dictatorial the more it succeeded in becoming a poverty-free, middle-income economy. A few bouts of liberalisation and social eruptions came to nothing. Since President Xi Jinping came to office in 2013, societal control and conformity have become increasingly systemic and ubiquitous. Anecdotally, a decade ago, China had a security camera for every ten citizens. Now there is one for every two.

Military forecasts went similarly awry. Accepted wisdom was that China would never seek to grow its military in step with its booming economy. One reason for this was the typical Marxist-Leninist fear that a big army could threaten the Party’s grip on power as much as protect it. China was expected to opt for a relatively modest military, heavy on boots and light on tech. The PLA would only develop a limited range of key weapons systems to keep foes like the Russians and the US at bay. But China would not rival or threaten them militarily, so the thinking went. Now, China’s military seeks to match that of the US both in mass and sophistication in the air, on sea and on land. China has all but succeeded in this goal – except for nukes. And China is rushing to close that gap. That is what lies at the heart of the New Cold War.

Our next misconception was geostrategic. We believed that China’s trading partners would never be tempted by China’s political system. They just wanted to get rich too. The Chinese political system was deemed a non-exportable commodity. As many as 40 per cent of the emergent economies in the Global South, which account for 85 per cent of the world’s population and 40 per cent of GDP, were partnered with the US through a network of 60 to 80 defence treaties. The US provided varying degrees of defence and security guarantees to these allies. And Washington fed their governments with a hefty flow of dollars, a substantial part of it in the form of military aid to local governments. That was the price of subservience.

The US network of defence treaties and agreements first served the US Cold War objective of limiting the spread of communism from 1947 onwards. Treaties were implemented between 1947 and 1960 with multiple countries. There were also many agreements that were not treaties and several covert actions backed by military interference and assistance. Although the pace of signing of new treaties slowed down after the sixties, the network continued to operate until Trump took office for the second time. Trump looks to monetise US defence support. Trump considers treaties to be a form of economic exploitation practised at the expense of the United States.

The US has now successfully demolished nearly all the alliances that kept this edifice in place. What has emerged in its stead is a generalised resentment of the US-led world order and the search for an alternative ideology.

The Chinese, being long term thinkers, have been codifying this alternative ideology for years. While Putin dreamed of empire, the Chinese planners were at the drawing board. What emerged is embodied in the Chinese ‘5 Global Initiatives’ which set out Beijing’s vision of the New World Order: Community with a Shared Future for Mankind (CSFM) (2013); The Belt & Road Initiative (BRI) (2013); Global Development Initiative (GDI) (2021); Global Security Initiative (GSI) (2022); and Global Civilization Initiative (GCI) (March 2023).

The ‘initiatives’ represent a vision of how to organise practically every aspect of international relations. They represent a blueprint for trade, security and a global economy that promotes ‘Common Prosperity’. The word ‘democracy’ is not mentioned once. When first published the ‘initiatives’ were taken as political slogans by western commentators. Now, to many in the Global South, the ‘initiatives’ seem like principles to combat US bullying and coercion. That shift in perception matches a shift in US policy and rhetoric – not China’s. The desire for a multipolar world order, to replace what was seen as a unipolar one dominated by the US hegemon and its allies, manifested itself diplomatically and culturally from the early noughties. This led to the formation of the BRICS in Yekaterinburg in 2009 with Brazil, Russia, India and China as founding member states. In organisational terms, the revolt against the US-dominated World Order is now the common denominator of the Global South, the BRICS and the Shanghai Cooperation Organization.

What does this mean for global trade and influence? If President Trump were to disappear tomorrow, there would be no return to a globalised free market trading system. That is because American voters do not want it. The isolationism that characterises US society today was not created by Trump. The electorate created Trump. The American people would elect a successor in his mould, too. Consequently, the future is for US bilateral trade deals that yield short-term advantages to the US. The lodestar of a unified policy for trade and diplomacy will be to monetise foreign relations.

Short-sighted US bilateralism works to Beijing’s advantage. China can dominate the multilateral stage and organisations like the G20, where the US absence creates a power vacuum. It also empowers Beijing to make regional bilateral trade deals in the Global South. That dominance starts with trade but ends with ideology.

In contrast, even a future Democrat US government would have a tough job reinvigorating its former alliances. The US is seen as having punished its former allies with mercantile and coercive trade deals. And Washington has simultaneously withdrawn its soft power and aid from emergent economies. Both were critical to global convergence towards enhanced human health, decency and dignity.

And then along came the ‘CRINKS’ – the sci-fi sounding acronym for China, Russia, Iran and North Korea. Not so long ago, the possibility that these countries would coalesce into an alliance was not taken very seriously. Even after the invasion of Ukraine, the accepted wisdom was that China and Russia were only in a temporary alliance of convenience. Too much economic disparity would stop this marriage of convenience becoming something more serious. This reasoning was, again, fundamentally flawed.

The coalition of the CRINKS is more than a marriage of convenience. There is a shared ideology. The CRINKS have a common goal: to undo the existing US-led world order – an objective shared, with variations on the theme, with the emergent economies of the Global South. The word CRINKS is a name for a bunch of states. But it does not define how they are organised. They work as an alliance.

The coming together of CRINKS into an alliance mirrors the formation of the Axis in the 1930s. The individual fascist states, with often conflicting goals and disparate economies, coalesced. Their common goal was to overturn the existing world order that threatened their existence and was perceived to have caused them historic wrongs.

When China’s Foreign Minister Wang Yi told the EU’s Kaja Kallas in July 2025 that ‘China cannot allow Russia to lose the war in Ukraine’, he said three things not one. Wang Yi simultaneously ended any pretence that China was neutral in the European conflict initiated by its ally Russia. He made explicit that the common goal of overturning the existing world order was the overarching ideology that united China and Russia. That goal takes supremacy over trade and economics. It promotes Russia as an equal to China on the geopolitical stage, despite the fact that Russia’s entire economy is only equivalent in size to 10 per cent of China’s (and on a declining trend). Such disparities do not matter in alliance terms. And he defined the global nature of the alliance by clarifying that letting Russia lose in Ukraine would free up the US to focus more resources on containing China.

This is not happening in a vacuum. It finds far greater clarity of expression in military strategy, which suffers from far fewer ambiguities than vague language about globalisation, trade and economic convergence.

China has reset its nuclear doctrine to achieve parity with the US rather than just having enough nukes to deter the US. In five years, China has doubled its operational ICBM nuclear warheads to 600. It aims to increase them to 1,000 by 2030 and 1,500 by 2035. Both Russia and the US have similar military stockpiles of nuclear warheads – 4,300 and 3,700, respectively. Russia and the US deploy about 1,700 nuclear warheads each. Add China to Russia, and the US (without its allies) is set to face a two-to-one deployed nuclear warhead threat by 2035.

The US nuclear doctrine was always based on confronting twin threats from other powers. But readiness was defined as the ability to face off with a big power’s nuclear threat and at the same time as a smaller power’s non-nuclear threat. Think of fighting a nuclear war with Russia and conventional war in the Middle East at the same time. The idea was not to go head-to-head with a nuclear-armed China and Russia at the same time. The option of the US arming for that eventuality was often discussed and rejected as too costly. That has changed. Simultaneous confrontation in twin theatres is now a distinct probability. Today, strategic nuclear planning has to factor in the low-probability, big-impact event of a twin-theatre nuclear confrontation.

Looking back over the course of history, the US has only been able to extend security guarantees to powers in Asia such as Japan, at the same time as extending them to Europe, because the ‘Big Threat/Small Threat’ scenario made it credible. The new ‘Big Threat/Big Threat’ nuclear scenario destroys the credibility of the US Nuclear Umbrella and security guarantees for its remaining allies.

US deterrence policy is called ‘Counterforce Targeting’. It is a sophisticated damage-limitation exercise. Ultimately, what it means is that, in the case of nuclear war, the US must always have enough nukes to be able to save Boston and Berlin and not have to make the choice between saving Boston or Berlin.

So the US nuclear arsenal must be capable of: surviving a first strike and retaliating; limiting the amount of damage the attacker can inflict by destroying as many as possible of the enemy’s missiles before they are launched; and retaining enough firepower to deter a weakened enemy, or its allies, from undertaking further attacks against the US after the first round.

Clearly, if China and Russia’s ICBM-deployed nuclear warheads outnumber those of the US by two-to-one, none of the above objectives would be met.

Nevertheless, provided the US invests enough in its nuclear capacity in the next decade to deter both China and Russia acting in unison, the most likely scenario is for a Cold War but not a hot one. But that is a big ‘if’. Even if nuclear disparities persist between the major players, the result is still more likely to play out in conventional wars rather than nuclear ones.

The logic is that an aggressor, confident that it won’t get nuked, will be more confident in initiating localised, conventional wars that are unlikely to escalate to a nuclear threat. But wars are still wars and the likelihood is that there will be more of them. They will occur, as an expression of conventional great power rivalry. But two other factors will also contribute. The first is the proliferation of the number of nuclear-armed states. The second is the end of the pacifying influence of the US nuclear umbrella.

The US’ nuclear doctrine of nuclear deterrence is currently being shot to bits. There are far-reaching potential consequences. Nuclear Proliferation is the order of the future. The US nuclear umbrella is no longer effective. Therefore its security guarantees are vitiated, irrespective of who is the President of the US. The arithmetic is nuclear not political.

Europe will be on its own to reconstitute a credible nuclear deterrent – and bear the additional fiscal costs of doing so. The same fate will ultimately befall Japan and Korea.

China will not return to liberalised trade but use it as a tool to weaken the US and Europe. ‘Friendly’ trade relations do not sit well with a nuclear arms race.

The New Cold War will not be the same as the old one. This time, China will wrap the serpent of its supply chains around a myriad of countries alienated from the US. China’s geopolitical objective will be to create economic and military autonomy for itself, and ensure that the countries participating in its supply chains will be economically dependent on China.

China will seek global dominance of sectors (e.g. EVs, Renewable Energy, Shipping, Aerospace), irrespective of the economic logic of doing so. This matches the goal of increasing trading partners’ dependence on Chinese supply chains while satisfying Beijing’s global dominance and strategic autonomy goals.

I would add one forecast. China already roars like a mighty lion on the global stage. But it squeaks like a mouse when it comes to the global financial system. That is because the Renminbi is not a globalised currency (it accounts for about 2 per cent of global transactions and international reserves). The lack of internationalisation of the RMB is because Chinese economic policy has always sought  to control its currency domestically. The authorities fear that making the Renminbi freely tradeable could lead to the destabilisation of the domestic economy. This reflects a very traditional dilemma in ex-communist economies: the struggle between the Party’s aim to control everything and the reformers’ visions of liberalisation.

This may be changing. China’s traditional dependence on the US dollar for trade and as a safe asset for investing its reserves is out of kilter with Beijing’s ambitious geopolitical goals. China needs to dethrone the US dollar, at least partially, to reduce the risks of the US weaponising China’s dollar dependence.

Payment systems will determine what, if any, ‘new’ currencies erode the old US dollar-denominated trading system with all its traditional virtues (trust, institutions, supply of risk free assets and a convertible currency). Any currency that replaces the dollar in the global payments and reserve system will therefore have to mirror many of the characteristics of the US dollar as a reserve currency. Many elements can be duplicated by legislation; others could be created by market forces.

It is probable that China will use its world-beating payments systems to internationalise the Renminbi (RMB) for international trade. That would immediately reduce one systemic Chinese risk. Today, payments in the currency of a foreign trading partner passes through the US dollar to get to the RMB. That, as well as China’s holdings of US dollar denominated assets in its foreign exchange reserves, is seen by Beijing as a substantial political risk.

China always intended to replace the US at the top of the global pecking order: geopolitically, militarily and economically. But the process could have been strung out and been less disruptive than under the conditions of a new cold war.

Militarily, the US seeks to encircle and contain China – even refocusing military resources from the war in Europe to do so. Protectionism makes it hard for China to advance its economic aims by making incremental gains in its share of global trade. And it makes it challenging for China to get the technology it needs.

Every action leads to a reaction. China’s response in the New Cold War will cover the complete spectrum of these perceived threats. China will pursue military superiority and nuclear parity with the US, economic and technological autonomy, replacement of the US dollar, and the weaponisation of its supply chains. The new alliance it leads is germane to this strategy. By weakening democracies, it furthers each of China’s declared goals and makes them less costly to achieve.