With tensions rising between significant world powers US, China, and Russia, many feel the beginnings of a new cold war upon us. Throughout 2022, situations in both Ukraine and Taiwan have raised concerns that there is a growing threat of nuclear war. Russia’s military entered Ukraine in early 2022. There has been growing concern related to Europe’s largest nuclear plant, which is close to the contact line between Russian and Ukrainian forces. Simultaneously, tensions between China and Taiwan seem to escalate weekly. Are we entering another prolonged period of fear and uncertainty reminiscent of the Cold War?

Russia-Ukrainian relations expert Eugene Plotkin, an expatriate born and grew up in the Soviet Union and now resides in the US as a fintech CEO, has been analyzing the war in Ukraine and its potential global consequences. Plotkin says about the possibility of a new Cold War: “There is no doubt that tensions are growing. The latest development was the announcement of a partial mobilization by the Russian government. Citizens in both East and West are worried about the global consequences, including commodities shortages, civilian casualties, and the possibility of a nuclear war.”

The Cold War, the period of political tension between the US and the Soviet Union from the 1940s to the 1990s, left a lasting imprint of tension, mistrust, and threat between not only the two antagonists but also many countries that aligned with one or the other.

For many people, the fear of nuclear war and paranoia about surveillance, interference, and espionage had dissipated but never left completely. “In the Cold War,” explains Eugene Plotkin, “the two countries were fighting proxy wars. No direct fighting action, but psychological and economic warfare to weaken the opponent, while sending aid and arms to their opponents’ enemies.” We certainly see elements of that with Ukraine and Taiwan, but the twenty-first century presents its own unique factors as well.

Ukraine and Taiwan: “China’s threats could happen”

The unstable situation between the island of Taiwan and mainland China has grown even more fragile in recent years and has already been dubbed Southeast Asia’s “new Cold War.” China views Taiwan as an inalienable part of itself under the One-China principle and has expressed its unwavering intention to unify with Taiwan using any force necessary. “Though this threat has been a part of daily life for Taiwanese for decades,” Eugene Plotkin explains, “it had no direct impact on civilians. But with Russia’s invasion of Ukraine and US political actions concerning Taiwan, the threat has taken on renewed significance.”

It appears that the Russian military conflict in Ukraine has also influenced perspectives on China and Taiwan. Like Russia, China may be willing to do what many previously thought unlikely. Since 2016 tensions have increased between China and Taiwan, with China taking a more aggressive stance, including military exercises in the Taiwan region. “We cannot presume to know the plans or the timeline of the Chinese government. With that said, there are compelling reasons for China not to favor a military solution,” Eugene Plotkin explains. “Many Taiwanese are open to unification, but military action could drive them in the opposite direction. In addition, China is dealing with economic challenges and a military conflict could have significant consequences on its international trade relationships.”

Both the US and China have interests in Taiwan. It is a major manufacturer of both semiconductors and microchips. War in Taiwan for any reason would profoundly impact the global economy. Eugene Plotkin explains: “Like the hare and the turtle, China may decide that a more patient approach is more likely to get the desired result.”

How real is the threat?

The likelihood of a new, long-lasting cold war is difficult to gauge, but the possibility is real. Without question, Russia has endured significant impacts from its decision to use military force in Ukraine. Perhaps Russia’s example will deter China, or perhaps Russia’s ability to withstand Western sanctions will embolden China.

The US has walked a fine line on the Taiwan issue. Recently, Biden said that he would come to Taiwan’s aid if China attacked, and Nancy Pelosi made a historic visit to Taiwan in August 2022. The US has also continued to provide support to Taiwan’s military. In the meantime, the citizens of Taiwan wait to see if war will enter their country, as it has in Ukraine.

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Eugene Plotkin is a fintech enthusiast, financial professional, and startup CEO. He believes that fintech can transform personal finance on a broad scale. After years of investment banking, Plotkin is now investing in fintech fully through his startup TechWallet. TechWallet has been created to bring financial literacy to everyone.