As the Sino-American trade war continues to escalate, China appears to be opening a domestic front by fueling anti-American nationalism with strident rhetoric and decades-old Maoist-era war movies.

Until the trade talks between the two countries deadlocked two weeks ago and Washington raised tariffs from 10 to 25% on $200 billion of Chinese exports to the U.S., the Chinese government had kept a tight lid on its propaganda machine. The Communist Party's diligent censors made sure that not only the trade war received minimal coverage but also criticisms of the U.S. were suppressed in the media.

But Beijing took the gloves off in mid-May after the failed trade talks resulted in the immediate resumption of the trade war. Shrill anti-American rhetoric began to fill the official media. Washington is being portrayed as a bully bent on keeping China from growing rich and prosperous. To make sure that its message of defiance get across, the movie channel of the Chinese Central Television changed its original programming schedule for May 17-19 so that it could screen three old anti-American movies about the Korean War, Heroic Sons and Daughters (1964), Battle on Shangganling Mountain (1954), and Surprise Attack (1960). Since these movies have not been shown on official television for decades, their prominent return clearly signals that the Chinese government's intention to fan anti-American nationalism to generate popular support for its policies.

To be sure, Beijing has not gone all the way in its rhetorical escalation. The Chinese government has so far refrained from attacking Trump personally, most probably out of its concern that vilification of the self-proclaimed tariff warrior will only make matters worse.

However, if the Chinese government thinks that it can dial up and down its anti-American nationalist propaganda to suit its diplomatic objectives, it must think again.

While China's leaders are likely to reap some short-term political benefits by fueling anti-American nationalist sentiments at home, this strategy will be ultimately counter-productive, even self-defeating. Indeed, if the Chinese government truly intends to bring the Sino-American trade war to a negotiated conclusion, the last thing it should do is to unleash anti-Americanism among the Chinese public.

One of the sticking points that has prevented Chinese and American negotiators from reaching a deal is the text that details the terms of compliance and enforcement. China believes that these terms are lopsided since they place the onus of compliance on the Chinese side while giving the United States unilateral instruments for imposing sanctions in case of Chinese violations. Chinese leaders apparently fear that accepting such terms would be seen as swallowing another "unequal treaty." As it is unlikely that Washington will give much ground on the issue of enforcement due to Beijing's previous record of failure to live up to its promises on trade and market access, stoking nationalist sentiments now would only make it even more difficult for China to agree to an eventual deal that will need to contain credible terms of enforcement.

Soon the harsh reality, such as job losses in the export sector, will set in as the consequences of the trade war. © Reuters

Moreover, any political benefits the Chinese government hopes to reap from cranking up its nationalist propaganda machine are certain to be short-lived. Ordinary Chinese people outraged by the trade war and Washington's effort to cripple Huawei by denying it access to U.S. technology may be heartened by Beijing's uncompromising rhetoric, but soon the harsh reality will set in as the consequences of the trade war -- job losses in the export sector, lower economic growth, and turmoil in the Chinese stock markets -- become even more visible and painful. Victims of the trade war in China will initially blame the U.S. for their suffering, but their ire will inevitably turn toward their government if it fails to come up with effective solutions to restore confidence and revive the economy.

Finally, high-pitched anti-American nationalist propaganda is particularly dangerous because it raises unrealistic expectations and can paint Beijing itself into a corner. In the Korean War movies recently screened, the Americans were portrayed as brutal but bumbling cowards while the Chinese military were shown as fearless heroes. False bravado also filled official commentaries on the escalating trade war. In a widely circulated video clip of a commentary read on Chinese Central Television, the anchor declared that China would "fight until the world is made new." Such rhetoric will only make Beijing look foolish if it is not prepared for future escalations. Unfortunately for China, it will likely suffer even more devastating losses should the trade war -- and the ensuing tech war -- escalate further. In military jargon, the U.S. controls the so-called "escalation dominance" because it has at its disposal more destructive retaliatory policy instruments to counter Chinese moves.

Fortunately, it is not too late for Chinese leaders to tone down their anti-American nationalist propaganda and shift their attention to a more productive solution. Given the adversarial geopolitical dynamics underlying the tensions in their commercial relations, Beijing needs a pragmatic two-track long-term strategy if it still aspires to sustain its economic development in a peaceful environment. The first and most critical task is to arrest the dangerous downward spiral in U.S.-China relations by restraining its impulses to retaliate and seriously addressing America's concerns about its trade practices and national security policy. Since it takes two to tango, Chinese self-restraint may look weak but will serve its national interest and help preserve world peace if it can avert a new cold war.

The second course of action is to take advantage of the temporarily favorable political conditions created by the Sino-American trade war. A crisis is a terrible thing to waste, as the saying goes. President Xi Jinping should seize this opportunity to implement his promised -- but undelivered -- radical economic reforms. Such reforms will not only deliver long-term efficiency gains that will vastly exceed the losses from the trade war, but also remove the underlying structural and institutional factors responsible for wrecking China's commercial relationship with the United States.

Minxin Pei is a professor of government at Claremont McKenna College and currently holds the Chair in U.S.-China Relations at the Kluge Center of the Library of Congress