In the long, arduous process of trying to negotiate a new trade deal with China, the U.S. is learning something profound about the country across the table: The basic assumption Americans held about China for most of the last half-century may no longer hold.

Since the great opening to China in the 1970s, successive U.S. administrations have operated under the belief that China wanted to update its economy and then become a full, card-carrying member of the international economic system of the First World. The question was...