Minxin Pei suggests a „new“ Cold War is raging between China and the US, and Beijing will most likely lose, because it is failing to learn the two mistakes that ultimately led to the collapse of the Soviet Union: a costly arms race with the US and imperial overreach. Although China is economically far more efficient than the moribund and corrupt Soviet economy, growth has been sluggish, and it is “nowhere near as efficient as that of the US.”

In the wake of the Soviet Union’s demise, China was “obsessed” with the quest for an explanation. Chinese leaders came to the conclusion that Mikhail Gorbachev was too weak, and that he toyed with Western ideas of democracy which do not suit Russia. They believed that his perestroika reforms of the mid-1980s were leading the Soviet Union towards chaos. It explains Xi Jinping's opposition to reform, because he did not want to repeat Gorbachev’s mistakes.

Xi finds himself in a dilemma, because the lesson drawn from the downfall of the Soviet Union is that the Chinese Communist Party must deal with corruption and other social problems before outside forces compel it to do so. Restructuring the unwieldy state owned companies is the single most important step to boosting the economy. These companies “consume half of the country’s total bank credit, but contribute only 20% of value-added and employment.” A “strong” economy is “essential” to the unelected political leadership’s legitimacy.

Besides, economic resources produce military might. Although China’s military spending – $228 billion in 2017 – is nowhere near America’s $700 billion budget approved by Congress, it is “prepared to engage in a long-term war of attrition with the US,” and the South China Sea has been a major source of tension. The author points out that “China’s economy is not equipped to generate sufficient resources to support the level of spending that victory on this front would require.”

During the Cold War Gorbachev had to slow the arms race with the US, because he decided not to compete with Reagan on missile defence. He concluded that the sprawling Soviet defence establishment -- the army, navy, air force, strategic rocket forces, air defense forces, and all the infrastructure that supported them -- was a monumental burden on the country. "Defense spending was bleeding the other branches of the economy dry," he later said.

China, like the Soviet Union in its heyday, has failed to avert the danger of imperial overreach: Beijing does not hesitate to extend itself beyond its ability to maintain and expand its military and economic interests abroad. The “massive trade surpluses” in the course of the past three decades had allowed Chinese “to take on costly overseas commitments and subsidize deadbeat ‘allies.’”

Xi’s pet project, the $1 trillion Belt and Road Initiative (BRI) is “focused on the debt-financed construction of infrastructure in developing countries. Despite early signs of trouble – which, together with the Soviet Union’s experience, should give the CPC pause, China seems to determined “to push ahead with the BRI,” because Xi and others see it as a “pillar” of their new “grand strategy.”

From across Asia to Africa and Latin America, many cash-strapped countries have received Chinese “grants or heavily subsidized loans,” which critics call “debt-trap diplomacy.” The countries often can not afford to repay the sums, allowing Beijing to convert its economic loss into geopolitical gain. In 2017 Sri Lanka signed over a strategically-located port to a Chinese state-owned company on a 99-year lease.

But some projects, like the China-Pakistan trade Corridor could also “drain the Chinese government’s coffers, owing to the political turmoil in Pakistan. The deep-sea port of Gwadar situated on the Arabian Sea in the restive province of Balochistan spells trouble, due to turmoil in Pakistan and the separatist movement in the province. The author says, “like the Soviet Union, China is paying through the nose for a few friends, gaining only limited benefits while becoming increasingly entrenched” in a hostile environment. The unsustainable arms race may not bankrupt China, but it is a game that will soon prove costly, even though “the Sino-American Cold War has barely started.” It is a shame because a leader’s mistake should not be visited on his citizens.