Ladies and gentlemen! On my left, in the red corner, political heavyweight and president of the People’s Republic of China, Xi Jinping. On my right, in the blue corner, president of the United States of America, Donald Trump. The venue: the G20 summit in Buenos Aires. The prize: Undisputed champion of the world!

OK. The analogy is a little fanciful. But depictions of the looming showdown between the leaders of the world’s two biggest economies as the “fight of the century” are not wholly wide of the mark. Much is riding on whether Xi and Trump will settle their differences – or plunge the planet into a new age of uncertainty and, some analysts warn, a new cold war.

Speaking last week, Trump agreed it was a big moment. “I’m very prepared. I’ve been preparing for it all my life,” he said. China “wants to make a deal and we’re very happy with that”. Officials in Beijing were more cautious. China “hopes the Xi-Trump meeting goes smoothly,” said foreign affairs vice-minister Wang Chao. The markets are certainly nervous. Three rounds of punitive Trump tariffs on $200bn worth of Chinese goods, with the threat of more to come in January, have knocked Chinese stocks for six, down 27% year-on-year. US technology company shares have been hit by Chinese retaliation. Investors are watching closely. An impasse or worse, a row, could have serious implications for the global economy.

Observers also note Trump’s habit of behaving badly at international gatherings. He wrecked June’s G7 summit in Canada, trashing the final communique and insulting his host, Justin Trudeau. His disruptive antics at the Paris Armistice day ceremonies were widely criticised.

There are already signs of discord in Buenos Aires. China said it hoped the summit would send a clear signal on supporting a multilateral system of trade and cooperation. But the draft joint statement reportedly does not contain the G20’s customary, explicit call to fight protectionism. It also backs away from previous commitments on climate change – presumably at Trump’s insistence.

Xi and Trump have met before. During a Beijing state visit last November, Trump praised his Chinese counterpart, saying the two enjoyed “great chemistry”. But the mercurial US leader seemed to change his mind about his chum when he imposed trade sanctions, complaining of a lack of a level playing field. After initially welcoming Xi’s help, Trump later claimed Beijing was undermining his attempts to get North Korea to denuclearise.

Relations took a definitive turn for the worse last month when Mike Pence, the US vice-president, launched a furious, deliberately timed attack on Beijing, a pummelling subsequently likened to Churchill’s 1946 Iron Curtain speech foreshadowing the cold war.

“Pence signalled a fundamental shift in US policy on China: from half a century of engagement following Richard Nixon’s China visit in 1972, back to the containment once championed by cold war hawks,” wrote Cary Huang in the South China Morning Post.

“America hoped economic liberalisation would bring China into a greater partnership with us and the world. Instead, China has chosen economic aggression, which has, in turn, emboldened its growing military,” Pence said. Xi was using “an arsenal of policies inconsistent with free and fair trade, including tariffs, quotas, currency manipulation, forced technology transfers, intellectual property theft and industrial subsidies handed out like candy”.

It was a swingeing assault that also targeted China’s lamentable human rights record, alleged meddling in the US mid-term elections, and what Pence called “debt diplomacy” – strings-attached investment in prestige infrastructure projects in developing countries, notably the $1 trillion, 64-country Belt and Road initiative.

It was as though a host of half-submerged American concerns, including Xi’s efforts to isolate Taiwan’s “separatists” and the militarisation of the South China Sea, had suddenly burst to the surface all at once.

The onslaught had probably been coming for a while. As American power declines relative to China, the apparent consensus among US politicians, military leaders and businesses is that a period of competition and confrontation is inescapable. Analyst Minxin Pei said the shift reflected hard economic realities: in 2000, China’s GDP was 13% that of the US; by 2017, it had reached 63%. On these trends, China could soon eclipse the US in sheer economic clout.

Is a new superpower cold war inevitable? Commentators such as David Ignatius suggest that if it is, China, with its clearer vision and greater energy, is set to win. Trump’s isolationist “America First” policies were unintentionally facilitating China’s build-up, Ignatius wrote last year. Tariffs and angry words were no substitute for a global strategy.

Perhaps aknockout in Buenos Aires can be avoided. Trump seems to want a trade war truce. Minxin Pei said Xi should offer concessions on security issues to avoid a “calamitous cold war” and preserve a favourable global environment in which China could maintain its steady advance.

If he’s smart, Xi will take the advice – and take it on the chin. Given Trump’s blinkered, introspective outlook, the crumbling of the post-1945 international order, and a divided Europe’s chronic weakness, China has never had a better shot at the title of world No 1.