Take your ringside seats, people, as another US-China tournament of shadows unfolds. When Donald Trump spoke to Taiwan’s President Tsai Ing-wen and challenged established US-China policy, many parts of Asia, India included, quietly cheered.

As expected, China retaliated – by stealing a US Navy drone from South China Sea, testing both a departing president and an incoming one. Bill Clinton had the Taiwan Straits crisis, George Bush was greeted with the embarrassment of the EP-3E crash, and Barack Obama was challenged when five Chinese navy ships harassed the USNS Impeccable. Trump is being greeted ahead of his term but we await events with interest, because they could determine global events of the coming four years.

Both US and China are in a dangerous part of the field. China has to protect the aura of ‘core leader’ Xi Jinping, who is driving the combined tigers of nationalism, military modernisation, anti-corruption and a slowing economy. The US pivot has been more rhetorical than substantive, with TPP the focal point. That is now gone, giving China a unique opportunity to expand its sphere of influence.

China is losing any compunctions about using or threatening force in pursuit of its interests as the PLA becomes au fait with high-tech warfare. Last week revealed satellite pictures of China beefing up its military presence on the disputed Spratly Islands by installing large anti-aircraft guns and close-in weapons systems. The Asian Maritime Transparency Initiative tracking these developments concluded these facilities at Fiery Cross, Mischief and Subi Reefs are more sophisticated than the ones presently installed at Gaven, Hughes, Johnson and Cuarteron Reefs. By making overtly military installations, China can also move its actions beyond the purview of UNCLOS, which can only adjudicate on civilian issues.

China has driven a bus through Asean, leaving lofty ideals like Asean solidarity ground to dust. Cambodia, Laos, Brunei are singing from the same sheet, Rodrigo Duterte of Philippines is swinging wildly but apparently inching towards Beijing, Malaysia wants closer security ties with China as does post-coup Thailand. That leaves Vietnam, Singapore and Indonesia hoping for a credible alternative.

Into this comes Trump and his decision to upend Washington’s comfortable China assumptions. Interestingly, in the weeks after Trump’s election, almost all his major pronouncements have involved China, and his professed intention to go after China on trade and currency manipulation, etc. In an interview, Trump said, “I don’t know why we have to be bound by a one-China policy unless we make a deal with China having to do with other things, including trade.”

This promises to be interesting. Consider just a few things: China has increased its investments enormously in US in the last decade, employing 1,00,000 US workers compared to 10,000 in 2006, according to a recent report by New York based research firm Rhodium Group. Those are important figures for Trump who has put jobs front and centre of his presidency, but which hands an important leverage for China. Wang Jianlin, China’s richest man and the largest Chinese investor in US this week threatened to cut loose 20,000 US workers in retaliation if Trump steps out of line.

Of course China manipulates currency, but as capital flows out of China in large amounts, it’s been fighting to shore up the yuan, selling off US treasuries in large amounts. At some point, it will have to let the yuan devalue sharply, which will unleash a whole new storm.

Trump’s options against China therefore remain mainly military, though China has promised to support US ‘enemies’. If he can get US capacities back in the Asia-Pacific, strengthen allies like Japan, Korea, Singapore, and friends like India and Vietnam, it might be possible to contain China. Last week’s Shinzo Abe-Vladimir Putin summit in Japan therefore holds promise. It will also involve the US working to get a more ‘normal’ Russia relationship. The danger would be if Trump’s national security team give in to their instincts to open up the Middle East by going after Iran. That would suck the US back into this everlasting quagmire.

India is no stranger to pushing back against China. In the past decade, China has stupidly turned its South Asia policy into a zero-sum game between India and Pakistan, using it to block India’s rise, witness the NSG fiasco, Masood Azhar and UNSC reform. At every stage, China has sought to shore up Pakistan to bridge its gap with India, leaving traditional enmity to do the rest.

India came to the party late, but in the last few years India has begun to play a more asymmetric game. New Delhi removed its affirmation of the one-China policy in 2010 after China questioned India’s sovereignty in J&K. It has not only not been reinstated, India now demands an affirmation of ‘one-India’ from the Chinese. Arunachal Pradesh, thankfully, is seeing more international visitors despite Beijing’s hyperventilation – US ambassador Richard Verma, Karmapa Lama and soon, the Dalai Lama. Border infrastructure and border defence projects are beating glacial paces. In the South Asia mohalla, India is trying to be a better ‘padosan’.

The US therefore looms important in India’s strategic calculations, especially as India tries to bone up its own capabilities across the board to bridge the gap with China. The Modi government’s security-oriented outlook may be a good fit, but their trade policies are positively Neanderthal. And that means India could fall way short.