“There is an undeclared Cold War underway now in the IT sector,” Rudd said.
Increased scrutiny from the U.S. on Chinese firms could exacerbate the tension, according to Jonathan Fenby, chairman of the China team at independent research group TS Lombard. “U.S. moves designed to curb China’s technological development are likely to act as a fresh spur to its push to expand its cyber capacity,” he said in a note Thursday.
Though U.S.-China relations face numerous headaches, President Donald Trump visited his counterpart Xi Jinping in Beijing in November last year. The occasion was marked by camaraderie between the two leaders and the signing of business deals worth billions of dollars.
Regardless, U.S.-China relations are “pointing in a generally negative direction,” Rudd said.
“So far the rules of … avoiding incidents at sea and avoiding incidents the air have held,” but “we are in difficult, I think, geo-strategic times,” he added.