A ‘New Cold War’ has made the world more opaque, creating both opportunities and risks for international firms doing business around the world.
That was among the messages from a wide-ranging interview between Sir Robin Niblett, the former director of Chatham House, and Edwin Smith, editor-in-chief of Spear’s, which concluded the programme at Spear’s 500 Live on 7 May.
China and the US are in a ‘Thucydides trap’, said Sir Robin. The phrase was coined by American academic Graham T. Allison with reference to an observation by the ancient Greek historian Thucydides that ‘it was the rise of Athens and the fear that this instilled in Sparta that made [the Peloponnesian War] inevitable’.
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‘For the first time, the US [has] found in China a truly clear competitor that challenges it on all levels,’ said Sir Robin, touching on the Chinese economic boom, its military capability and ‘remarkable turnaround’ in the tech sector. ‘If you are sitting in Washington now, you see huge competition coming up.’
A global contest
Still, China’s power growth and economic security is limited by the American military presence in the first island chain from which China hugely depends for trade. ‘If you look out from Beijing, you feel threatened.’
Sir Robin explained to the audience that there is a ‘desire from China to break out of their vulnerability’, while ‘America definitely does not want to give up that dominant position.’
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He added: ‘It’s also an ideological contest. But it’s not communism versus capitalism. Instead it really is a top-down government [versus] a bottom-up government.’ According to Sir Robin, the fear that these two systems have of each other creates an added layer of tension to the geopolitical rivalry between China and the US.
[See also: All quiet in the great mall of China]
Sir Robin said the global trade war sparked by Donald Trump’s introduction of widespread and severe tariffs was a symptom of the tension between the world’s two superpowers. He added that the US president’s actions may prove to be a misstep, as they leave him with less headroom to punish or disincentivise China if it were to take action with regard to Taiwan – which he described as a ‘tinderbox’ that could turn the cold war into a hot one.
‘Prior to becoming president, Trump was asked what he would do if China invaded Taiwan,’ said Sir Robin. ‘He said there would be a big price to pay, and he would [impose high tariffs] on them. But that is what he has done now: he has fired the bullet that was reserved for the invasion of Taiwan.’
However, Sir Robin added, in the near term, ‘there is a low likelihood that [an invasion] will happen’.
Wealth creation amid the New Cold War
Sir Robin was asked how the developing geopolitical situation could play out for business.
‘A lot of the real growth opportunities won’t be in traditional markets,’ he said. ‘There will still be plenty of money made there – it’s still the wealthiest part of the world – but many of those markets make their money by linking to the Global South.’
He added: ‘Now, the U.S. is stepping back from its role as the global rule-setter.’ This, he argued, created space for nations and businesses to take advantage of a multi-polar world, in which certain companies and countries could play both sides of the US-China divide.
[See also: The murkier side of private markets]
For companies in the Global North, navigating this is tricky, the former Chatham House director explained. Trump might open certain doors now, but a future administration could reverse that.
‘We should be looking at countries like Indonesia, it’s a big market. But at the same time, there’s real concern around corruption there, that’s a big risk. You could find yourself on the wrong side of things.’
‘Diversity, inclusion and transparency are still the agents of long-term wealth creation.’
Spear’s 500 Live is the premier live event for private client professionals and leading figures from the private wealth and family office ecosystem. The 2025 edition took place at the Savoy in London and was attended by more than 500 high-calibre delegates.
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