Joe Biden and Xi Jinping toast during a luncheon for China in 2015 in Washington. Photo: AFP / Paul J Richards

That China went from being an American enemy in the 1950s, to an ally in the 1970s, and now back to be US public enemy No 1 today indicates that the two countries’ relationship is guided by their changing national interests.

From this perspective, one can predict the world’s most consequential and complicated relationship will remain tense, but will not descend into war or economic decoupling in the foreseeable future.

History of US-China relations

China and the US fought each other in the Korean War (1950-53) because of conflicting national-security interests. The US entered the war to keep the Korean Peninsula from falling into communist hands, maintaining an American strategic advantage in Northeast Asia. China entered the fray to prevent US forces from crossing the North Korean border into its territory.

However, as one conflict was resolved, another emerged in the 1960s. The Soviet Union and China were at loggerheads largely over border disputes among other issues. The two former allies even fought a brief border war in the 1960s.

The US took advantage of the Soviet-Chinese rupture. The late president Richard Nixon traveled to China seeking rapprochement to counter the Soviet Union in 1972. Mao Zedong and the communist leadership were receptive to the US gesture.

That “detente” spared China from the threat of a Soviet-initiated nuclear war.

The implosion of the Soviet Union in the 1990s, however, changed the US foreign-policy calculus and its national interests. The “peace dividend” that was supposed to result from the Soviet collapse did not happen.

Reduced defense spending sent defense-industry-dependent states such as California into an economic malaise. This changed US national interests again, reviving weapons development and production to revive such states’ economies.

But to justify a huge defense budget, the US needed a new “enemy.” China became the ideal candidate because it was (and still is) communist and was becoming increasingly strong, making it a credible “national security threat.”

Ironically, the perceived “China threat” turned into a self-fulfilling prophecy. The Asian country became an economic, technological and military powerhouse. This enabled China to push back US military and economic coercion.

Indeed, empirical evidence shows US attempts to contain China’s rise proved counterproductive, hurting America more than China.

The folly of anti-China policies

Blaming China for spreading Covid-19 instead of focusing on handling the pandemic properly ended up with a high infection and death rate from the virus compared with other countries. What’s more, the country’s economic woes got even worse, registering low growth, and that made possible only by massive quantitative easing by the Federal Reserve.

However, stoking demand to increase growth distorted the demand-supply equilibrium, triggering rises in the inflation rate. The worrisome inflation figures raised the fear that the Fed will raise interest rates, leading to stagflation, or rising inflation and unemployment at the same time.

US-China relations today

US-China relations are arguably at their lowest point since the two countries established diplomatic ties in 1979, in part because of colliding national interests. China’s phenomenal rise was perceived by many in the US as a threat, enabling it to compete with the US in almost every economic domain, from low-valued to high-end products. One major case in point is technology.

China became the leader in fifth-generation (5G) telecommunications, artificial intelligence and other technologies, putting US tech firms at risk. Using the “national security” excuse, then-president Donald Trump declared war on Chinese technology companies such as Huawei and ZTE. Yet during the years that the US used Huawei products, there was never any evidence that China used its technologies to steal US secrets.

Simply put, China’s rise sank the relationship with the US because the two countries viewed it from different perspectives. China wanted to improve its people’s livelihoods and share its economic achievements with the world. To the US, China’s rise was a threat to its economic, technological and military dominance, therefore undermining American national interests.

Where is the US-China relationship heading?

Given US President Joe Biden’s low approval rate, an overwhelmingly anti-China Congress and negative public opinion on China, the US-China relationship will sink even lower and become more intense. In addition to propagating the usual anti-China rhetoric of “human-rights abuses” and “predatory economic practices,” the US government is playing the Taiwan card heavily.

Washington and Taipei have admitted that American soldiers were on the island to train Taiwanese troops. The Biden administration is urging United Nations members to allow Taiwanese participation in UN-associated organizations such as the World Health Organization. And Biden made an “off-the-cuff” comment about the US defending Taiwan if it is attacked (by China).

Taiwan is China’s reddest of red lines. Encouraging or promoting its de jure independence would most likely heighten US-China tensions, potentially leading to war. It is not an exaggeration to suggest that China will use military means to crush a Taiwanese declaration of official independence even if Biden makes good on his pledge to defend the island.

In an attempt to deflect negative public opinion on his performance at home, Biden is playing the China card, releasing the US intelligence communities’ report on the origins of the coronavirus that causes the Covid-19 respiratory disease. Though the report was inconclusive, it is predictable that it will be used to bolster the narrative that the virus might have been released from the Wuhan Virology Institute, which would sink US-China relations even further.

And even if Biden in fact wants to reset the US-China relationship, he is constrained from doing so by the prevailing anti-China environment. Being “soft” on China would prompt the majority of lawmakers in both political parties to accuse him of “appeasement,” increasing the likelihood of Biden losing his party’s majority in Congress as well as the presidency in 2022 and beyond.

That said, the US and China will not descend into all-out economic or military conflicts because the collateral damage to both sides would simply be too huge to contemplate. The US and China are nuclear powers capable of wiping each other off the map, taking much of the rest of the world with them. In addition, the two economies are deeply entwined, each depending on the other to sustain socio-economic growth and stability.

In the final analysis, US-China relations will continue to go up and down for the foreseeable future. But there will be no serious economic or military conflicts. Maintaining economic prosperity and survival is the ultimate “national interest,” after all.

Ken Moak taught economic theory, public policy and globalization at university level for 33 years. He co-authored a book titled China’s Economic Rise and Its Global Impact in 2015. His second book, Developed Nations and the Economic Impact of Globalization, was published by Palgrave McMillan Springer.