Yes, this ‘Cold War’ is different – Australia needs to act accordingly

For a brief moment in the devastation and aftermath of the Second World War, global peace, stability and prosperity looked like real possibilities.

Built in the rubble of the old-world order of colonial empires, the potential for this new world was quickly dashed as two new, armed, ideological camps emerged with competing visions of the global future.

Revolutionary Marxist Communism as championed by Stalin’s Soviet Union and then, in short order, Mao’s People’s Republic of China stood diametrically opposed to the “exploitative” nature of the capitalist Western world, citing centuries of exploitation of the working class and native populations by the ruling elite and colonial expansion to support the rapid post-war decolonisation of the “global South”.

Standing opposite this order of revolutionary powers was the capitalist, Western, liberal democratic world, led in large part by the United States, which throughout the war, emerged as the world’s pre-eminent economic, industrial, and for a short time, nuclear power.

As both blocs solidified into a dichotomy of East versus West, the competition would – despite being kept below the threat of direct, nuclear exchange and confrontation between the two global hegemons – effectively keep this potentially world-ending, hot competition, cold.

While kinetic proxy conflicts in southeast and central Asia broke out, the “grey” zone operations conducted by intelligence agencies on both sides expanded this geopolitical competition across the world, until ultimately, the final collapse of the Soviet Union in 1990 heralded the “End of History” and if many policymakers, analysts, and historians are to be believed, the ultimate victory of liberal democratic, capitalism on the global stage.

Fast forward to today and the jubilation and hubris which characterised the years immediately following the collapse of the Soviet Union has now transformed into a far less optimistic vision of the future, as once again great power competition and multipolarity are alive and well.

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Where the previous incarnation of Cold War was largely defined by the ideological competition between East and West, this contemporary “Cold War”, despite the rhetoric to the contrary by political leaders on both sides, is largely defined by a combination of economic, strategic, and demographic competitions, marking the emergence of a rapidly different form of competition.

Recognising this, Mark Leonard, director of the European Council on Foreign Relations, in a piece for ASPI titled, This cold war is different, highlights the dramatically different nature of this new Cold War, with major implications for Australia and its future in the era of multipolar great power competition.

We’ve moved on from purely ideological competition

While ideological competition is alive and well across the Western world, with the full spectrum of Left-through-to-Right political ideologies and movements each taking to the field of public discourse, and in some cases the streets (and one could argue based on the testimony provided by KGB defector Yuri Bezmenov that this division comes as a result of successful subversion campaigns conducted by the KGB, FSB and to a lesser extent, but increasing in recent years, China’s MSS), such ideological competition at the national level seems to be less a priority.

This ideological basis of the first Cold War forced the world’s nations into one of three camps, the US-led West or “Free World”, the Soviet-led “Revolutionary World”, and the third and by far, at least in some capacity, numerically larger “Non-aligned” bloc which sought to avoid being directly captured by the two competing parties, however in its modern incarnation, this new potential Cold War is markedly different.

Highlighting this, Leonard explains, “Between the end of World War II and the fall of the Berlin Wall, the two main forces defining the international order were ideological conflict, which split the world into two camps, and the quest for independence, which led to the proliferation of states, from 50 in 1945 to more than 150 in 1989–91. While the two forces interacted, ideological conflict was dominant: struggles for independence often morphed into proxy wars, and countries were forced either to join a bloc or define themselves by their ‘non-alignment’.”

Unpacking the stark difference of the modern reality, Leonard adds, “Whereas the US may be expecting Cold War II, shaped primarily by ideological polarisation, China seems to be betting on global fragmentation. Yes, it has tried to offer non-Western countries an alternative to Western-dominated institutions such as the G7 and the International Monetary Fund. But, in China’s view, the quest for sovereignty and independence is fundamentally incompatible with the formation of Cold War–style blocs.”

The basis of China’s markedly different approach to the rather “philosophical” ideological debate and competition championed and expected by the United States and the Western World is Beijing’s belief that the world is unavoidably trending towards a more multipolar world, made up of multiple great powers competing for economic, political, and strategic primacy within their regional areas of focus and more broadly within the larger global context.

This world looks more like the world of the 19th century and early-20th century, with a number of competing great powers holding vast overseas economic, political, and strategic interests and often overlapping spheres of influence, effectively putting an end to the era of unrestricted globalisation as it has existed at least for the last five decades.

American strategic analyst and author Peter Zeihan, in his book, The End of the World is Just the Beginning: Mapping the Collapse of Globalization, highlights the nature of this new reality, stating, “Bottom line: the world we know is eminently fragile. And that’s when it is working to design. Today’s economic landscape isn’t so much dependent upon as it is eminently addicted to American strategic and tactical overwatch. Remove the Americans, and long-haul shipping degrades from being the norm to being the exception. Remove mass consumption due to demographic collapses and the entire economic argument for mass integration collapses. One way or another, our ‘normal’ is going to end, and end soon.”

The inherently fractured and nation-centric reality of this new world has given rise to a number of parallel multilateral organisations like the recently expanded BRICS, led by Brazil, Russia, India, China, and South Africa and Shanghai Cooperation Organisation, largely spearheaded by Xi Jinping’s Beijing with an emphasis on circumventing the likes of the World Bank, International Monetary Fund and the like, while also seeking to undermine the dominance of the US dollar-led world order.

Leonard highlights this stating, “Perhaps the biggest news, though, was the BRICS’ announcement that six countries — Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates — would become full-fledged members by the beginning of next year. Pre-summit editorialising notwithstanding, China is under no illusion that countries like Saudi Arabia and the UAE will join it in a bona fide anti-Western bloc; Beijing’s goals are more subtle.

“Joining the BRICS increases countries’ freedom of action — for example, by increasing access to alternative sources of financing or, eventually, providing a genuine alternative to the US dollar for trade, investment and reserves. A world in which countries are not dependent on the West, but free to explore other options, serves China’s interests far better than a narrower, more loyal pro-China alliance ever could,” Leonard explains.

Declining US influence and the rise of a multipolar world

By now, it is an inescapable reality that the United States is in a period of comparative economic, political, and strategic decline when compared to the often-meteoric rise and whole-of-nation commitment of emerging great and middle powers to become nations of influence and consequence on the global stage.

In the Indo-Pacific we have China, India, Indonesia, Japan, Vietnam, and Thailand, each with sizeable populations, rapidly developing industrial bases and ensuing economic power, mounting strategic capabilities and clout, and importantly, their own clear national interests and ambitions, separate to the whims and desires of multinational organisations.

This attitude of having their “eyes on the prize” contrasts starkly with the seeming “asleep at the wheel” approach that seems to characterise the policymaking circles across the Western world, presenting major challenges to the enduring prominence, stability and capacity of the post-Second World War order, something touched on by Leonard.

“The picture that emerges is of a world in which the superpowers lack sufficient economic, military or ideological clout to force the rest of the world — in particular, the increasingly confident ‘middle powers’ — to pick a side. From South Korea to Niger to the new BRICS members, countries can afford to advance their own goals and interests, rather than pledging fealty to the superpowers,” Leonard explains.

Unpacking the nature of this multipolar world, and of particular importance for Australia, multipolar Indo-Pacific, is Amanda Hodge, The Australian’s Southeast Asia correspondent, stating, in her piece, Jakarta to offer bullied neighbours cold comfort, stating: “As Southeast Asia’s largest economy and one of its last democracies, much was expected of Indonesia when it took over the chairmanship of the Association of Southeast Asian Nations this year ... While Australia and other ASEAN partners continue to assure the bloc of its centrality in all issues related to Southeast Asia, the reality is that new, smaller, more agile groupings have been emerging to deal with issues that ASEAN will not.”

Ironically, another pillar of Beijing’s offer is a message we in the West have traditionally offered and championed, that is respect for national sovereignty, individual and national self-determination, economic development and cultural sensitivities, yet, for Leonard, in a piece titled, China Is Ready for a World of Disorder: America is not, China’s attempts in recent years have increasingly been seen, almost as counter-revolutionary.

“This attempt to create an alternative theory of modernity, in contrast to the post–Cold War formulation of liberal democracy and free markets as the epitome of modern development, is at the core of Xi’s Global Civilization Initiative. This high-profile project is intended to signal that unlike the United States and European countries, which lecture others on subjects such as climate change and LGBTQ rights, China respects the sovereignty and civilisation of other powers.”

Leonard expands on this, in another piece for ASPI, titled, Governing a post-Western world, where he states, “Unfortunately, Westerners will need to reduce their ambitions for universalist institutions, treating them less as sources of solutions and more as sites for sharing information and facilitating conflict management and resolution ... We must also recognise that much of the action is now happening outside Western-led institutions.”

For Australia, a nation heavily dependent on the global status quo, particularly following the end of proactive, “forward leaning” strategic doctrines like the concept of “Forward Defence” and our completely unfettered adherence to globalisation which has seen the rollout of increasingly restrictive planning, industrial relations, and broader economic development policy and regulation in favour of the low-hanging fruit provided by a rather unsophisticated mining and resources and services driven economy – simply, this needs to change and Australia’s policymakers need to shift towards a policy of having our “eyes on the prize” and engage the Australian public and industry to build a powerful plan for Australia to successfully respond to the era of great power competition in a multipolar world and region.

Final thoughts

Only by recognising the relative decline of the United States (not a popular opinion to state out loud) and accepting that the United States has limitations can Australia truly begin to take stock of the challenges of operating in this increasingly multipolar world.

However, it is critical for us to understand that Australia’s security, prosperity, and stability will not be determined by events in Europe, nor will they be determined by circumstances in the Middle East, while they may influence circumstance, our national future will not be determined by these areas.

It is important to highlight that in the coming era of multipolarity, Australia will face an increasingly competitive Indo-Pacific. Indeed, separate to the People’s Republic of China, our immediate region is home to some of the world’s largest populations with its fastest growing economies with their own unique designs and economic, political, and strategic ambitions for the region.

Rather, we have to accept that while the world is increasingly becoming “multipolar”, the Indo-Pacific, in particular, is rapidly becoming the most hotly contested region in the world. Underpinned by the emerging economic, political, and strategic might of powers like China, India, Pakistan, Thailand, Vietnam, and the established and re-emerging capability of both South Korea and Japan, in particular, are serving to create a hotbed of competition on our doorstep.

Recognising this array of challenges and opportunities, both the Australian public and its policymakers need to look beyond the myopic lens that has traditionally dominated our diplomatic, strategic, and economic policy making since Federation.

Ultimately, we need to see Australia begin to play the long game to fully capitalise on the opportunities transforming the Indo-Pacific. The most important question now becomes, when will we see a more detailed analysis and response to the challenges and opportunities facing Australia and when will we see both a narrative and strategy that better helps industry and the Australian public understand the challenges faced and opportunities we have presented before us?

As events continue to unfold throughout the region and China continues to throw its economic, political, and strategic weight around, can Australia afford to remain a secondary power, or does it need to embrace a larger, more independent role in an era of increasing great power competition?

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..