Rizal Ramli served as Indonesia's Coordinating Minister for Maritime Affairs in President Joko Widodo's first cabinet. He served as Finance Minister under President Abdurrahman Wahid.

The lines are being drawn in what is increasingly being seen as the onset of a new Cold War. But there is an important difference between the first Cold War and today's rising tensions.

During the post-World War II tussle between the Soviet Union and the United States, China was an economic backwater and mostly inward-looking as it grappled with widespread poverty and domestic political upheaval.

Now, with the second-largest economy and with the number three ranked military after America and Russia, China matters more than ever. Beijing's growing influence weighs heavily not only on America's foreign policy establishment but practically the entire world as President Xi Jinping and his Chinese Communist Party push to make China the regional hegemon.

When it comes to this new Cold War, America must not only compete with China for supremacy in the Indo-Pacific, now it must also deal with the new and proximate security threats to Europe as a consequence of the war in Ukraine.

And therein lies an extraordinary challenge to the U.S. As Washington and its allies get drawn deeper into their proxy war with Russia, the fewer resources President Joe Biden will have to focus on countering China in the Indo-Pacific.

To be fair to President Biden and his foreign policy team, there has been an improvement in U.S. Asia policy since he entered office. Unlike Donald Trump, Biden and his Secretary of State Antony Blinken understand the need for alliances in this new Cold War.

Joe Biden, flanked by Antony Blinken, speaks about security assistance to Ukraine at the White House on March 16: Biden and Blinken understand the need for alliances in this new Cold War.   © AP

Ties with Europe have been restored, while diplomatic relations between America and its friends in Asia such as Japan, South Korea and the ASEAN bloc have also been strengthened and bilateral and multilateral military alliances.

Biden's multilateral approach was on display at the May Quad summit in Tokyo, where the leaders of Japan, Australia, India and the U.S. issued a joint statement reiterating their commitment to a free and open Indo-Pacific.

At the same time, China wants to counter American alliances in a new and ambitious diplomatic drive unveiled during this past April's Boao Forum for Asia in China, which is considered the Asian Davos.

Xi's big idea, which he calls the Global Security Initiative, or GSI, would be a pact between China and other countries to "strengthen political mutual trust, respect sovereignty and territorial integrity, and for security cooperation."

Such a grandiloquent description is meant to impress, but the hypocrisy was not lost on many Asians. For all of us in ASEAN with stakes in the South China Sea, it struck me and many others as hypocritical when we heard Xi upholding principles of sovereignty and territorial integrity.

Then there is the issue of the GSI as a mechanism for building political trust. Such a vision can be met only if the sponsoring party is already trusted. Yet who trusts China?

Many political observers, myself included, are dubious, considering how Beijing has used the Belt and Road Initiative to gain control over recipient countries' strategic assets and ensnare them in debt traps.

It is impossible to predict how the new Cold War will evolve and for how long it will persist. One key determinant will be America's midterm elections and the next presidential race.

Whether the Republicans win big and regain control of the White House is critical. While the overwhelming majority of Europeans view the war in Ukraine as their war, the American public is less supportive, a point that is not lost on Republicans running for office.

Another factor is not only whether Russia can withstand the pain of economic sanctions but whether or not the general public in countries indirectly affected by the sanctions can stand the pain as well.

Economics is a critical driver not only in the war in Ukraine but as a potential constraint on China's foreign adventures. For the first time in 40 years, China's economy is slowing down. Some economists believe China has entered a middle-income trap. Hence its economy will never regain the high growth rates seen in previous decades.

If this is true, China might be compelled to become less ambitious in its foreign policy, although one should not expect Asia's giant to abandon its long-term vision of achieving hegemony.

There is, of course, a more optimistic scenario. Rather than hunkering down for a long war in Ukraine, Russia could decide that it has reached the limit of its capabilities. A negotiated settlement in the near future would avert some of the more dire economic costs and potential political shocks of the war.

Yet there should be no delusions about returning to the status quo. The war has already fundamentally altered American and European commitments to security arrangements, with NATO drawing the lesson that only an expanded and strengthened military pact can deter any future wars with Russia.

If Russia gets little in return for the war efforts, and Beijing sees a stronger NATO and more determined America able to maintain the post-World War II order, then Xi could decide to recalibrate China's foreign policy.

Washington, in turn, could decide that it would make more sense to seek a less antagonistic relationship with Beijing. This would still be a Cold War with occasional tensions and intense competition, but it would be much less dangerous than what we fear today.