2024 could be the pivotal year for Cold War 2

China's economy has weakened, but the U.S. may be taken off the board.

When I write about world affairs, I tend to use some terms like “New Axis” and “Cold War 2” might seem melodramatic. But my purpose in using those terms isn’t to rile people up or scare them; it’s because I think they effectively describe what’s going on in the world today. Cold War 2 is just a mental model for thinking about how geopolitical narratives, allegiances, and organizations are tending to bifurcate between two rival blocs. And I call China, Russia, and Iran the “New Axis” because their partnership is more of a loose, convenient alignment against the U.S. than a close, cooperative alliance — similar to the way that Germany, Japan, and Italy were partners of convenience in World War 2.

Anyway, I think 2024 is shaping up to be a pivotal year for Cold War 2.

2022 was a disastrous year for the New Axis. Putin’s attempted conquest of Ukraine was unexpectedly repulsed, revealing a number of weaknesses in the Russian military machine and making Western weaponry look good in comparison. The war prompted Taiwan to begin to take its own defense more seriously, and scared China into at least momentarily trying to distance itself from Russia. Meanwhile, a midterm election made the U.S. look a bit more stable.

In 2023, the empires struck back. Russia mobilized its whole society for the war, even as the Germans and the British dithered. Western weaponry proved insufficient to allow the Ukrainians to advance in the face of a determined Russian defense. Opposition to Ukraine aid became the dominant position on the Right in America, thanks to tireless anti-Ukraine advocacy by Tucker Carlson and the conversion of Elon Musk. And in October, the New Axis got a huge windfall — a war in Gaza that drew U.S. attention and resources away from Asia and Europe, even as it divided the progressive movement.

But at the same time, a major event threatened to undermine New Axis power in the long term: China’s real estate collapse accelerated, effectively putting an end to the rapid economic growth that had defined that country’s position in the world for three decades.

So here we are in 2024. All signs point to this being a pivotal year in the global contest. On one hand, China’s weakening economy is making the New Axis a less menacing opponent, but this transition is very slow and marginal. On the other hand, U.S. domestic political turmoil threatens to remove it from the equation, thus leaving China a free hand in Asia. And all the while, the war in Gaza festers on, diverting U.S. attention and resources from the far more important theater in Asia.

China’s weakening economy is the core of New Axis power

The U.S. overwhelmed its opponents in World War 2 by outproducing them. In the Cold War, the U.S. and its developed democratic allies were able to outmatch the USSR in an arms race, and to gain an edge in precision weaponry through their mastery of the semiconductor industry. But in Cold War 2, the economic dominance that propelled liberal nations to victory in the 20th century no longer exists. China’s transformation into the world’s factory equalized the balance of economic might between autocratic and democratic countries:

Source: World Bank

This, fundamentally, is the reason the New Axis is a dire threat to the liberal world order. If China weren’t such a manufacturing powerhouse, Russia’s combination of aggression, oil revenue, nuclear bluster, and information operations would certainly be annoying, but wouldn’t represent a real challenge to the alliances that defeated it in the first Cold War. It’s only because of the looming specter of Chinese manufacturing might that Russia and Iran are more than just rogue states. As things stand, China threatens to be able to overwhelm the U.S. in a war, in much the same way that the U.S. overran the Axis powers in WW2.

In fact, it’s not an exaggeration to say that China’s economic rise is the fundamental reason that Cold War 2 is happening in the first place. The next question is whether China’s economic troubles mean that the legs have been cut out from under the New Axis’ economic colossus. The answer is no.