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The writer is the Freeman chair in China studies at the Center for Strategic and International Studies

Close followers of the US-China relationship have become accustomed to both whiplash and cognitive dissonance.

First, the whiplash.

A little more than a week ago, US secretary of state Antony Blinken was set to travel to Beijing for a long-awaited visit that many hoped would begin the process of erecting “guardrails” on the fractious bilateral relationship. Yet the appearance of a suspected Chinese surveillance balloon over Montana not only scuttled the trip, but steered relations towards their tensest point since August, when the People’s Liberation Army fired ballistic missiles near Taiwan in protest against the visit of US House Speaker Nancy Pelosi.

Prospects for a rescheduled trip by Blinken look dim, in part because of Beijing’s actions after the incident. After issuing a rare statement of “regret”, government officials went on the offensive, criticising the US for destroying the balloon and calling US actions “irresponsible and seriously wrong”. In a final display of pique, Wei Fenghe, China’s defence minister, refused to answer calls from Pentagon chief Lloyd Austin.

Next, the cognitive dissonance.

The political fallout from the balloon in Washington included a unanimous resolution in the House of Representatives condemning the “brazen violation of United States sovereignty”. But the US commerce department reported that bilateral trade last year reached a record-breaking $690bn, with America’s deficit with China growing by nearly $30bn. 

How, then, to square the reality that relations are defined by diplomatic crises and heightened military tensions on one hand, and growing economic interdependence on the other?

If the presence of a Chinese surveillance balloon in US airspace and the risks of a military conflict over Taiwan indicate that this is a new cold war, it is an odd one. While the two superpowers with rival ideologies battle for global leadership, they are also engaging in history-defying economic co-operation.

But perhaps this is the point. While it’s hard not to apply the label “cold war” to today’s US-China relationship, this provides little clarity on where the pair are headed. If they can manage the proliferation of security and geopolitical faultlines and the growing frequency of flashpoints, then this version of the cold war may look more like 1970s detente than the 1962 Cuban missile crisis.

To do this, however, each side must confront and control their own distinct pathologies.

For the US, the challenge is to push past its toxic, often debilitating domestic politics to focus on building a better global order for the 21st century that accommodates China. As the media and political circus around the surveillance balloon has demonstrated, America is prone to popular and political hyperventilation and hysteria in precisely the areas where seriousness and equanimity are demanded. While the Biden administration demonstrated notable poise as it navigated recent events, the same cannot be said for Congress and much of the media establishment, which sought to score political points and attract views by hyping the balloon and its significance.

The US will face crises of far greater magnitude than a surveillance balloon as it rubs up against an increasingly assertive China, and it cannot rest solely on the laurel of moral righteousness. Even where Beijing is the clear aggressor, as it is in so many areas including its threats to Taiwan, the US bears the burden of effective crisis management, as the weight of global leadership demands. What’s more, even US allies and partners that share concerns over China’s military belligerence still desire stable US-Chinese relations.

Beijing’s challenges are even greater, driven by its autocratic, centralised system under Xi Jinping. As Xi’s power and ambitions have grown, so too has his seeming inability to perceive how China’s more aggressive foreign policy has provoked antipathy among countries in its neighbourhood and farther afield. From Japan’s historic increase in defence spending and recalibration of its national security strategy to tensions along the Sino-Indian border, Beijing is catalysing a growing militarisation in Asia, largely by close US allies responding to its belligerence.

Xi’s administration claims it wants bilateral relations put on a stable footing, but its behaviour since the balloon’s discovery belies this. So does China’s steady support for Russia since it invaded Ukraine. If Xi travels to Moscow this spring, as he’s likely to do, it will tear at China’s relations with the US and Europe. Finally, if Beijing uses a possible trip to Taiwan by US House Speaker Kevin McCarthy to intimidate Taiwan again with missile overflights, it will deepen the consensus in democratic capitals that the Chinese leadership is a menace.

Whereas two decades ago it appeared that the US-China relationship would be defined by growing economic ties, today it seems it will be shaped by security challenges and crises. The goal, then, is to fast forward this new cold war straight to detente. There is a clear need for the two powers to collaborate on shared transnational challenges. But so bleak is the state of bilateral relations that for now, and for the foreseeable future, the true test for both leaderships will be their ability to steer clear from catastrophe.

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