This article first appeared in Forum, The Edge Malaysia Weekly on August 8, 2022 - August 14, 2022

History suggests that war happens because of history. Nothing happens out of the blue. World War I was an accident that could have been avoided, but blew up because the leading powers could not accommodate the rise of Germany. Twenty years later, Germany’s humiliation and punishment led to the emergence of the Nazi regime, which caused World War II. In Asia, a militarist Japan invaded China and challenged the United States over command of the Pacific, culminating in a simultaneous attack on Pearl Harbour and the invasion of Hong Kong, the Philippines and Malaya on Dec 7, 1941.

World War II devastated Europe and Asia, leaving the US an undisputed victor, but facing a new rival, the wounded but militarily strong Union of Socialist Soviet Republics (USSR). On Feb 22, 1946, US Ambassador to Moscow George Kennan sent his famous “Long Telegram” spelling out USSR policy, which ominously began, “USSR still lives in antagonistic capitalist encirclement with which in the long run there can be no permanent peaceful coexistence.” His recommendations on containment of the USSR signalled the beginning of the Cold War which did not end till 1991, with the collapse of the Soviet Union. The Cold War was strategically won when US President Richard Nixon initiated the US-China détente that pulled China out of the Soviet camp.

The pattern of history is whether the incumbent powers will accommodate the rise of new powers. The incumbent powers seem to fear the rise of new powers and, instead of trying to balance them against each other as was the historical pattern, they now seek to contain them.

Since the Ukraine war, Nato has treated Russia and China as being in one camp, whereas other powers, such as countries with large populations like India, Indonesia, Brazil and South Africa, have not exactly chosen sides. But the rhetoric of war is already daily in the news.

In 2021, the Atlantic Council published “The Longer Telegram” by “Anonymous”, rumoured to be a senior Biden administration official. Written in the style of George Kennan’s 1946 “Long Telegram”, the author sees the US strategic imperative as meeting the “rise of an increasingly authoritarian China under President and General-Secretary Xi Jinping”. The Longer Telegram spells out what the US should do about this challenge. It claims that the new strategy is not “containment with Chinese characteristics and a dream of CCP collapse”, but a qualitatively and granular policy to “changing their [Xi’s and his inner circle’s] political and strategic paradigm”. In other words, the US will adopt Sun Tzu’s maxim that “what is of supreme importance in war is to attack the enemy’s strategy”.

Notice that the US is already thinking aloud about war with China, not about how to form a peaceful partnership with strategic rivals to create a more stable global order. It is a contest about supremacy of ideology, driven by technology, finance, media and all forms of power. What the Longer Telegram seems to have forgotten is the dynamic interaction between rivals. Attacking the enemy’s strategy invites a counter-strategy that generates even more complex counter-counter strategies.

The Longer Telegram identifies the need to protect the US and its allies’ core national interests. This requires measures to retain collective economic and technological superiority; protect the global status of the US dollar; maintain overwhelming conventional military deterrence and prevent any acceptable shift in the strategic nuclear balance; prevent any Chinese territorial expansion, especially forcible reunification with Taiwan; defend and reform the current rules-based liberal international order; and address shared global threats such as climate change.

Two aspects of the Longer Telegram are strikingly different from the 1946 version. First, Kennan did not specifically link Soviet policy to Stalin, whereas the Longer Telegram identifies autocracy personally with Xi. Second, the USSR was militarily strong, but as Kennan pointed out, had huge structural weaknesses. China, on the other hand, has become economically a near peer of the US. “Anonymous” thus argued that not to have an integrated strategy on the China threat “has been a dereliction of national responsibility”. 

US Speaker Nancy Pelosi’s visit to Taiwan last week was designed to provoke China, as she is the highest-profile US politician to visit Taiwan in the last 25 years. Beijing is upset that while officially proclaiming an unchanged “One China” policy, all US actions appear to point towards a One China, One Taiwan policy.

In effect, the US seems to have crossed two red lines, which the Russians and the Chinese have separately articulated very clearly. For the Russians, it was the eastward drift of Nato to include Ukraine. For the Chinese, it is the Taiwan question. In the former case, poking the Russian bear in the eye resulted in the Ukraine War. In the latter, poking the Chinese dragon may be the current American psychological sport, taunting China to act when she is likely to lose from any conflict. After all, all warfare is psychological, because perception often becomes reality.

In its detailed and operationalised strategy, the Longer Telegram recognises that red lines exist. However, it seeks to “identify important but less critical areas where neither red lines nor the delineation of major national interests may be necessary, but where the full force of strategic competition should be deployed by the United States against China”. In other words, expect more proxy wars from all quarters.

The Prussian strategist Carl von Clausewitz defined war “as politics (or continuation of policy) by other means”. It is a tool for ultimate political goals, such as the subordination or subjugation of your enemies or rivals. Thus, we witness the increasing weaponisation of finance, media, technology and other formerly “soft powers” in the current rivalry. The Pelosi visit is really a psychological game of “chicken”, seeing whether Beijing will be willing to sit by while she is not ready for an all-out war.

But will the Pelosi visit trigger a hard war over the Taiwan Straits? Despite a lot of posturing, including military exercises and shows of force, outright conflict is unlikely in the short term unless an accident happens. This is a game of strategic patience, where time deals different cards.

In June, the Center for a New American Security (CNAS) conducted a war game exploring a fictional war over Taiwan, set in 2027. Why 2027? That is roughly the date by which American military experts think that China would reach parity with American power. The war game suggested that “a conflict over Taiwan may quickly lead to consequences far beyond what Beijing and Washington intend. The war game demonstrated how quickly a conflict could escalate, with both China and the US crossing red lines”. In other words, it would escalate very quickly to nuclear war.

If a timetable seems to have been set, at least by the military strategists, what should investors do? The Ukraine war forced everyone to think the unthinkable. At this stage, it seems confined to Ukraine using conventional warfare, but the risk of nuclear weapons, even limited in size, can no longer be ruled out. In other words, in situations when we cannot compute the risks, stick to what we know best and do not try anything new.

The planet and all its living things function on energy, which is freely available from the sun. But humanity has exploited fossil fuels, which is solar energy embedded in fossils and, today, nuclear energy. Overuse of such energy has heated the planet, causing biodiversity loss, droughts and desertification. Soon, we will be fighting not just over energy, but food, water and liveable space. Physicists familiar with thermodynamic systems know that when heating rises to a certain level, the system becomes unstable.

This is exactly the time for cool heads to be working for peace, rather than trying to poke each other to start a war. The Scientific Revolution taught us to be rational but, in the end, human beings remain deeply emotional, and it is emotion that is driving conflict and war.

Which is exactly why it is so unpredictable, and yet inevitable.

Tan Sri Andrew Sheng writes on global issues that affect investors

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