Introduction: The New Cold War

A Plan for Countering China

Introduction: The New Cold War

Mar 28, 2023 7 min read

The authoritarian regime in Beijing—its global ambitions, growing power, and values diametrically opposed to America’s own—poses the greatest threat the United States has faced since the collapse of the Soviet Union. In both word and deed, the People’s Republic of China (PRC), a one-party state ruled by the CCP, has made it abundantly clear that it is determined to supplant U.S. global leadership, establish hegemony over the Indo–Pacific, and rewrite the international order in the CCP’s image.

Since the turn of the millennium, the PRC has pilfered trillions of dollars from the U.S. economy through industrial espionage and intellectual property theft, deployed diplomatic threats and military coercion against the U.S. and its partners and allies, unlawfully laid claim over some of the world’s most vital shipping lanes, harassed U.S. military vessels operating in international waters, compromised the security of countless Americans with malicious apps and spyware, and exported aspects of its authoritarian model abroad, including on U.S. college campuses and through covert police stations operating in U.S. cities.

Under the leadership of General Secretary Xi Jinping, the PRC has charted a dramatically more aggressive and repressive path in recent years, alarming global capitals with the rapid growth of Chinese military capabilities, aggressive “wolf warrior” diplomacy, growing military intimidation of China’s neighbors, and abusive trade practices.

The PRC has deployed economic coercion tactics against a wide variety of U.S. partners and allies, from South Korea to Australia and Canada to Norway,even as its approach to its numerous outstanding territorial disputes has grown far more belligerent. The PRC has raised tensions with a variety of regional capitals across the Indo–Pacific with expansive claims and provocative “grey zone” intimidation tactics. This approach extends from China’s unlawful claims over virtually the entire South China Sea—where it has constructed militarized artificial islands and deployed an expanding “maritime militia”—to its encroachments and harassment activities around Taiwan and the Japanese-controlled Senkaku Islands, to deadly skirmishes with Indian soldiers along the disputed Himalayan border.

This is why the 2022 U.S. National Defense Strategy (NDS) labeled the PRC’s “coercive and increasingly aggressive endeavor to refashion the Indo–Pacific region” as America’s “most consequential and systemic challenge.” So acute is the threat that the NDS contends that deterring PRC aggression in the Indo–Pacific takes precedence even over Russia’s invasion of Ukraine and its highly destabilizing activities in Europe.2

It is past time for a plan to protect the American homeland from nefarious PRC actions and take the fight to the Chinese Communist Party (CCP).

The Heritage Foundation’s plan for countering China deliberately invokes the legacy of the Cold War. While American officials have been reluctant to frame the rivalry with China in these terms, their trepidation ignores a simple reality. “China pursues its own Cold War strategy against America,” Heritage Foundation senior fellow for China Strategy Michael Pillsbury observed in his 2015 best seller The Hundred-Year Marathon.3 “It does us little good to repeat again and again that we aren’t seeking a new Cold War when the CCP has been stealthily waging one against us for years,” former Deputy National Security Advisor Matt Pottinger testified before the new House Select Committee on Strategic Competition between the United States and the Chinese Communist Party in 2023.4

The origin of the term “Cold War” is often ascribed to a 1945 essay by George Orwell,5 later entering the popular discourse to describe the state of hostility between the U.S. and the Soviet Union between the end of World War II and the collapse of the USSR in 1991. A Cold War is now defined as a state of “open yet restricted rivalry,” that is “waged on political economic and propaganda fronts.”6 Others define it as a “condition of rivalry, mistrust, and often open hostility short of violence.”7 What distinguishes a Cold War from other inter-state rivalries of this nature is the participation of rival super powers quarreling on a global scale, with global implications. By any widely accepted definition of the term, the China–U.S. relationship today increasingly bears the hallmarks of a Cold War.

The Chinese leadership will object to this framing. For years, Beijing has sought to discredit the U.S. for adopting a “Cold War mentality,” any time the U.S. has taken action to counter malign CCP activities. Beijing is likely to portray any discussion of a New Cold War as further evidence of U.S. “warmongering.”

However, one of the defining characteristics of the last Cold War was the absence of direct military conflict between the U.S. and USSR. America was able to win that contest without fighting. That remains the goal today, although China is a very different adversary from the Soviet Union and this Cold War is unlikely to bear great resemblance to the last.

On the upside, the U.S. and China are unlikely to engage in the kind of costly and bloody proxy wars that were all too common in the last Cold War. The PRC today is less likely to support revolutionary military insurgencies abroad or seek to overthrow foreign governments by force, preferring instead to purchase its influence and use economic coercion to achieve its geopolitical aims.

The PRC also has its own vulnerabilities to contend with, from an aging population, to major environmental and public health challenges, to an increasingly anxious neighborhood. In recent years, Beijing has threatened and alienated a wide variety of its Indo-Pacific peers, improving the operating environment for the U.S. and invigorating balancing coalitions like the Quad and AUKUS.

SR270 Map 1

On the other hand, the PRC is in several ways a more capable adversary than the USSR ever was. The Soviet Union was a military powerhouse but never a true economic peer of the U.S. The PRC, by contrast, enjoys the economic engine and emerging military capabilities to sustain or even surpass the U.S. if Washington fails to act.

As a result, the PRC is less susceptible to some of the strategies the U.S. deployed in the last Cold War. After decades of engagement, China is deeply enmeshed in global governance institutions and the global economy, a top trading partner not only of the U.S. but a broad cross section of global capitals and U.S. allies. Even today, amid growing geopolitical tensions, the COVID-19 pandemic, tariffs and trade wars, and ongoing decoupling efforts, China-U.S. bilateral trade is still growing, and breaking new records.

While a major rebalancing of the economic relationship is long overdue, the U.S. cannot rely on the free world to sever all economic ties with China as it once did with the USSR. Nor can it count on crippling the PRC by outspending it in a costly arms race.

As concerning, America’s economy and society are far more exposed to the PRC than they ever were to the USSR, creating new vulnerabilities for espionage, supply chain disruptions, or influence operations. Chinese entities freely raise capital in American markets, purchase American land, and lobby U.S. government officials. China’s state-run model of capitalism has blurred the lines between private enterprise and the dictates and priorities of the CCP. Many Chinese companies are forced to embed Communist Party agents in their corporate governance structures. All Chinese companies, including a TikTok app that boasts 150 million active American users, are required by law to share information with Chinese intelligence services upon request.

While recent years have witnessed growing recognition of the scope of the threat from the PRC in Washington, the U.S. government has been too slow to respond. It has failed to implement a comprehensive plan that protects the U.S. homeland from the nefarious activities of the PRC while degrading China’s ability to harm the United States and its citizens, allies, and partners.

In crafting an effective response, the U.S. government must protect the American economy and public from exploitation and malicious actions by the CCP. Doing so will require an offensive-defensive mix, including vouchsafing Americans and their interests from Chinese actions that undermine U.S. competitiveness and prosperity as well as active measures to degrade Beijing’s ability to threaten America and its partners and allies. Washington must develop a plan that will impose costs on China and make Chinese economic aggression against America unaffordable for Beijing while ensuring that the U.S. economy continues to grow and thrive.

The plan for countering China consists of three parts. Part I describes the rationale for U.S. actions, examining the nature of the China–U.S. rivalry and the strengths and weaknesses of the two countries. Part II presents a comprehensive integrated mix of policy actions to prevail over the China threat. These policy actions represent the heart of the plan. Part III summarizes key points from Part II and how the U.S. government must operationalize the plan.


1. Bonnie S. Glaser, “How China Uses Economic Coercion to Silence Critics and Achieve its Political Aims Globally,” testimony before the Congressional-Executive Commission on China, U.S. House of Representatives, 117th Cong., December 7, 2021, .gov/files/documents/CECC%20Hearing%20Testimony%20-%20Bonnie%20Glaser.pdf (accessed February 14, 2023).

2. U.S. Department of Defense, “2022 National Defense Strategy of the United States of America,” /2003103845/-1/-1/1/2022-NATIONAL-DEFENSE-STRATEGY-NPR-MDR.PDF (accessed March 13, 2023).

3. Michael Pillsbury, The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower (New York: Henry Holt and Company, 2015).

4. Nick Mordowanec, “China Has Been Waging ‘Cold War’ Against U.S. for Years: Ex-NSA,” Newsweek, February 28, 20223, /china-waging-cold-war-against-united-states-pottinger-1784462 (accessed March 13, 2023).

5. The Orwell Foundation, “You and the Atom Bomb,” -and-the-atom-bomb/ (accessed March 13, 2023).

6. Encyclopedia Britannica, “Cold War, International Politics,” (accessed March 16, 2023).

7. Merriam-Webster, “Cold War,” (accessed March 13, 2023).