On a late August weekend in 2017, a week after he was forced out as U.S. President Donald Trump’s chief strategist, Steve Bannon made a trip to the Connecticut country house of Henry Kissinger to talk about China.

It was more of a pilgrimage, actually: the prophet of disruption seeking out the high priest of geopolitics to make the case that Kissinger’s view of the United States’ relationship with China was hopelessly out of date. The two men talked for hours in the sunroom, and while they enjoyed each other’s company, they did not, in the end, see eye to eye.

“He agreed 100 per cent with my analysis,” Bannon recalled, “but he disagreed with my conclusions because they were too blunt force.”

Kissinger confirmed this account, saying he told his visitor that the United States and China must strive for the “partial co-operation of countries that by normal standards might be considered enemies.”

“He has a different view,” Kissinger added dryly.

In the four decades since the United States re-established diplomatic ties with China, Kissinger and Bannon can be seen as bookends.

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With his secret trip to Beijing in 1971, Kissinger kicked off an era of engagement marked by the stubborn belief that bringing China out of its isolation through trade and investment would make America safer — and perhaps make China more like America. That era now seems to be ending, giving way to a more hostile one, with a trade war encouraged by Bannon and the ascendancy of his view that the United States must confront China while it still can.

From the White House to the boardroom, from academia to the news media, American attitudes toward China have soured to an extent unseen since Kissinger’s historic trip. China’s rapid rise, and the acute sense of grievance and insecurity it has stirred in the United States, has led some to conclude, as the title of a recent book about the relationship suggested, that these two giants are “destined for war.”

The United States and China, of course, have had their ups and downs ever since the 1780s, when New England brigs first sailed to China with beaver skins and silver coins, ushering in more than a century of exchanges that sent Christian missionaries to the Middle Kingdom and Chinese railroad workers to the Wild West.

The two nations fought as allies in World War II, then faced off as foes in the Cold War, before Richard Nixon rekindled relations with Beijing to isolate the Soviets. The hopes generated by Deng Xiaoping’s economic opening in the 1980s were dashed by the Tiananmen Square massacre. The trade deals of the 1990s were strained when wayward U.S. bombs destroyed the Chinese Embassy in Belgrade.

For at least a decade, Americans have blamed China for shuttered factories and jobless workers. Public views of China swung from positive to negative in 2012, according to Pew Global Research, and have remained underwater since. About 38 per cent of Americans now view China favourably — down from 44 per cent in 2017 — but that number is not markedly worse than it has been for the last half-decade.

Yet the current chill in the relationship seems different, less a temporary rupture than a searching reappraisal of what a status-quo superpower should do about an ambitious, formidable challenger.

The Trump administration has adopted a more confrontational stance but struggled to set clear goals and articulate a strategy for achieving them. To date, its efforts have been scattershot: trade tariffs that have rattled Beijing but also Wall Street, a foreign aid program dwarfed by China’s enormous loans for infrastructure overseas, a warning against Chinese meddling in U.S. elections without much evidence of such activity.

The White House is channelling antagonism that extends far beyond Washington. Business executives accuse China of stealing technology from their firms. College professors suspect that some of its exchange students are spies. Military officers see its warships advancing across the Pacific.

Many Americans who embraced trade and co-operation with China had hoped that bringing it into the global economic order would, over time, pull its politics and society into a kind of convergence with the West. Yet China is heading in the opposite direction under the strongman rule of Xi Jinping, toward less political freedom and more state control of the economy — a surveillance state at home that nourishes imperial ambitions abroad. Far from modelling itself on the United States, China is presenting itself as a defiant alternative.

“In our good-hearted way, we wanted to believe that with a few more cultural exchanges, a few more visiting ballet troupes, China would come around,” said Orville H. Schell, director of the centre on U.S.-China Relations at the Asia Society. “But Xi Jinping shut the door on that. He said, ‘Not only are we not going there, but we have our own model now.’”

Kevin Rudd, a former prime minister of Australia and longtime observer of China, said the political and economic changes in China under Xi, and in the United States under Trump, had shattered the consensus in both nations about how to manage the relationship. That, Rudd said, portended an uncertain — and almost certainly more dangerous — future.

“You can almost hear the ripping sound somewhere up the middle of the Pacific,” Rudd said in an interview, “and I’m not sure how that’s put back together.”

‘Tacit Allies’

Realpolitik motivated Kissinger’s outreach to China: He and Nixon saw it as a counterweight to the Soviet Union. But they were not immune to what a U.S. diplomat, U. Alexis Johnson, called “rapturous enchantment.” After a return trip to Beijing in 1973 to open a liaison office, a euphoric Kissinger wrote to Nixon, “We have now become tacit allies.”

In the United States, China suddenly became cool. “Americans donned Mao jackets and Mao hats, stir-fried in woks, and wielded chopsticks,” journalist John Pomfret wrote in his 2016 book, “The Beautiful Country and the Middle Kingdom.” Shortly after Nixon’s landmark trip, the Chinese cut a $392 million (U.S.) deal with a Texas company to build 16 fertilizer plants in China, an early sign of engagement’s bottom-line benefits.

Diplomatic relations would ebb and flow, buffeted by domestic politics in both nations. But trade across the Pacific began a relentless upward march. Companies like IBM, Citibank and Jeep were entranced by the vastness of the Chinese market, and the pioneers of engagement marvelled at how quickly commerce came to define the relationship.

Even a devastating setback, the deadly crackdown on the 1989 Tiananmen Square democracy movement, did not snuff out those ties. President George Bush, who once headed the U.S. liaison office in Beijing, secretly sent his national security adviser, Brent Scowcroft, to Beijing to keep the relationship from going off the rails.

In March 2000, after the United States opened the door to China’s entry into the World Trade Organization, Bill Clinton laid out the case for economic integration as the best way to bring freedom to the country. In one of the more forceful arguments for engagement made by a U.S. president, he promised that WTO membership would wean China off state-owned enterprises and open its society.

“The more China liberalizes its economy, the more fully it will liberate the potential of its people — their initiative, their imagination, their remarkable spirit of enterprise,” he said. “And when individuals have the power, not just to dream but to realize their dreams, they will demand a greater say.”

Clinton’s view was widely shared at the time, and not without reason. Under President Jiang Zemin and his prime minister, Zhu Rongji, the Communist Party withdrew from large parts of the economy, encouraged private entrepreneurship and welcomed foreign investors.

Over the decades, the United States and China built the mightiest commercial relationship in history: Trade between the two ballooned from $5 billion in 1980 to $231 billion in 2004. China soon became the manufacturer of choice for T-shirts and toys, laptops and television sets. General Motors, Motorola and other U.S. companies that invested in China made healthy profits. To satisfy the American appetite for low-cost goods, China began exporting more to Walmart alone than it did to most entire nations.

By 2006, though, China’s transition to market economics was slowing, and it began pursuing a policy of “Indigenous innovation,” establishing targets to achieve dominance in high-tech industries that were traditionally the domain of the United States and Japan. By the time Barack Obama was elected, a narrative had taken hold in some quarters that letting China into the World Trade Organization was a mistake.

Obama called out Beijing on the theft of U.S. technology and intellectual property, and needled two of his advisers, Lawrence H. Summers and Jeffrey A. Bader, about their work in negotiating with China during the Clinton administration. “Did you guys give away too much?” he asked, according to Bader.

Trump has since turned Obama’s private gibe into a political slogan. Letting China into the WTO, he argues, was the original sin of the United States’ dealings with China — a defective agreement that gave the Chinese license to steal from U.S. companies and siphon off U.S. jobs.

But to Charlene Barshefsky, the U.S. trade representative who ran the negotiations with Beijing in the 1990s, whether China should have been admitted is a “nonsensical question.”

“Of course it was going to end up in the WTO,” she said.

With a fifth of the world’s population, nuclear weapons, a permanent seat in the U.N. Security Council and a track record of economic opening, China could not realistically be kept out, she argued. It already had significant access to the world’s major economies, including the United States. If it did not join the WTO, it would have continued to reap the benefits without being forced to open its own markets.

“The issue is, was it going to be a substantively, commercially significant deal?” Barshefsky said. “And I would argue that the proof is in the pudding.” China, she noted, now imports more goods from the world than any country besides the United States.

But with every step China took to open its markets, it erected new barriers that hobbled foreign competitors and favoured its own companies. The problem was not China’s WTO membership but the failure of U.S. officials to use the tools in the agreement to force China’s compliance with the terms, Barshefsky said.

“The U.S. did the right thing,” she said. “We just didn’t continue to do the right thing.”

‘Economic Aggression’

Peter Navarro, the bomb-throwing economist who heads Trump’s trade office, said he first noticed the corrosive impact China was having on the U.S. economy in the early 2000s, when he was teaching evening classes at the University of California, Irvine.

During the day, most of his students held down jobs. But Navarro recalled noticing that “my students were having more and more problems in the job market. It was a puzzle to me. I thought, ‘What’s going on here?’”

Navarro already suspected that jobs were moving to China because of its low labour costs. But after a year of research, he concluded there were four other factors at play: China’s theft of U.S. intellectual property, its subsidies for exporters, its currency manipulation and its dearth of environmental regulations.

“All roads led to China,” he said.

The economist remade himself into a China Cassandra, publishing books like “The Coming China Wars” and “Death by China” that put him on the radical fringe of his profession. But his views dovetailed with those of Trump, who had railed for decades against the unfair trade practices of China and, earlier, Japan.

While the Japanese threat was overblown, there is little disagreement now that China contributed to the hollowing out of U.S. manufacturing. Cheap Chinese clothing decimated textile jobs between 1973 and 2015. Chinese furniture makers wiped out their U.S. counterparts. For blue-collar America, “Made in China” became synonymous with the ravages of globalization.

Now ensconced in the White House, Navarro has supplied the intellectual grist for Trump’s trade war with China. In June, his office published a report titled “How China’s Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World,” which accused China of preying on U.S. companies in a variety of ways.

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Other economists still dismiss Navarro’s prescription, which consists of piling on more tariffs until China agrees to fundamental changes. But privately, many businesspeople share his diagnosis. Their immediate concern is Made in China 2025, a state policy that seeks to dominate key industries by forcing U.S. companies to hand over technology and assisting Chinese firms with subsidies.

Occasionally, U.S. frustrations with Chinese partners and competitors spill into the open. In July 2010, the then-Chief executive of General Electric, Jeff Immelt, said at a private dinner, “I am not sure that in the end they want any of us to win, or any of us to be successful.” General Electric backpedaled furiously after his comments were reported. Despite their grievances, U.S. business executives were still afraid of antagonizing the Chinese authorities, who could order raids on their operations.

Doing business in China became even harder after the financial crisis of 2008. By that time, China had passed Japan to become the United States’ largest creditor, holding about $600 billion of U.S. Treasury notes. Chinese officials were appalled by the bankruptcy of Lehman Bros. and fearful of their own exposure. If they were always suspicious of American politicians, now they turned against their friends on Wall Street, too, taking a harder line in negotiations and rejecting their calls to open up the Chinese economy further.

“Chinese officials began to dress down Americans and skip meetings,” said James McGregor, chairman of greater China for APCO Worldwide, who advises companies dealing with Chinese officials. “For the Chinese leadership, this was the emperor-had-no-clothes moment.”

Strategic Competition

For all of Obama’s wariness on trade, he was as committed to engaging China as each of his predecessors going back to Nixon. He sought global issues, like climate change and nuclear non-proliferation, on which the United States and China could work together. But his strategy, known as the “Asia pivot,” also called for a greater U.S. diplomatic and military presence in the region, to try to manage China’s rise.

The Trump administration has rejected the Obama strategy, branding it naive and inadequate. It has adopted a more combative approach, formally designating China a “strategic competitor” and “revisionist power,” one that is trying to rewrite the rules of the post-World War II order to match its own interests and ambitions. Trump’s aides say that China has gotten away with too much for too long, and that only a show of U.S. strength can force it to change its behaviour.

The cornerstone of this policy has been the trade war, with new tariffs on $250 billion worth of Chinese exports in place and Trump threatening more. Yet the administration’s objective is uncertain.

Trump has floated various demands that would be difficult to enforce or require a wholesale overhaul of the Chinese economy, including a sharp reduction in the trade deficit and an end to coercive technology transfers. Some trade and security hawks have urged “decoupling” the United States entirely from the Chinese economy.

The Trump administration has taken a tougher approach outside trade as well. It has stepped up naval patrols in the disputed waters of the South China Sea, where the Chinese have been turning isolated spits of reef into military installations. But it has not laid out how the United States can stop a Chinese military buildup that is already tilting the balance of power in the region in Beijing’s favour.

The Trump administration has also taken a harder line on economic espionage, indicting Chinese citizens accused of being intelligence agents, tightening controls on Chinese investment, and even considering a plan to restrict Chinese students from attending U.S. universities.

Left unanswered has been a profound question: How can the United States compete by closing its doors when openness has been key to its success?

Vice President Mike Pence laid out the case for confrontation in a harshly worded speech last month that many interpreted as a call for a new Cold War, with the United States as defender of democracy and market competition and China as the champion of authoritarianism and state-led growth. But as he called for a sustained effort to counter Beijing, Pence made little effort to reach beyond America’s partisan divide and rally the entire nation behind it.

“To put it bluntly,” he said, “President Trump’s leadership is working; and China wants a different American president.”

The conflict with China is intensifying amid unresolved concerns about U.S. leadership and overreach that built up during the era of globalization, and in Iraq, Afghanistan, Syria and other distant battlefields.

If anything, Trump has shown a desire to pull back from commitments around the world — a pattern, critics say, that has sundered trade deals like the Trans-Pacific Partnership and undermined U.S. allies, depriving the United States of one of its greatest advantages in a geopolitical competition.

China’s own efforts to win friends and expand its influence, meanwhile, have brought mixed results so far. As part of its Belt and Road Initiative, Beijing has dangled billions of dollars for infrastructure projects in dozens of countries, from Malaysia to Kenya. The Trump administration has condemned the loans as predatory and is trying to put together its own competing aid program.

Trump’s instincts about China are not easy to pigeonhole. He speaks often about his friendship with Xi and admiringly of China’s economic success. His grievances are rooted in trade — in the conviction that China has been cheating the United States — rather than in Beijing’s ambitions in Asia or its repressive political system.

Among Trump’s advisers, there is a wide disparity in how they view the coming contest. Some, like Navarro, cast it as an epic struggle over who will control the commanding heights of the 21st-century economy. Others, like Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, and Director of the National Economic Council Larry Kudlow have tried to put the brakes on Trump’s most belligerent trade moves.

They feud constantly, and at times publicly, about who speaks for the president, leaving both Chinese officials and China experts in the United States confused about the direction of U.S. policy.

Bannon, who says his views of China were formed as a young Navy officer in the Pacific in the 1970s, speaks in almost apocalyptic terms, foreseeing a clash of civilizations. “It’s either going to be the Confucian, mercantilist model or the liberal democratic Western model handed down from Greece,” he said.

Matthew Pottinger, senior director for Asia on the National Security Council, portrays it as more of a traditional, Cold War-style rivalry between superpowers with competing ideologies. He began his career as a foreign correspondent in China, where a state security officer once roughed him up.

“We in the Trump administration have updated our China policy to bring the concept of competition to the forefront,” Pottinger said recently at the Chinese Embassy in Washington. “But I think that’s OK. For us, in the United States, competition is not a four-letter word.”

The trouble is, there has been very little public debate about any of this. What are the goals of U.S. competition with China: toppling the communist regime or thwarting China’s rise, as some in China have long suspected, or merely trying to modify its behaviour? And in any case, how much are Americans willing to sacrifice for it?

Graham Allison, a Harvard professor who worked in the Defense Department to reshape relations with former Soviet nations after the end of the last Cold War, argues that a rising power like China is likely to come to blows with an established one like the United States. In his book “Destined for War,” he describes a chilling scenario in which an accidental naval collision in the South China Sea escalates calamitously into a full-blown conflict.

But some China experts note that other areas of dispute, like Taiwan, have not become more fraught in recent years. And whatever the issue, they argue, a disastrous miscalculation is more likely without persistent engagement.

“Americans need to understand that if we go down the road of disengagement from China in pursuit of unbridled competition, it will not be a repetition of the Cold War with the Soviet Union,” said Bader, the former Obama adviser. “The rest of the world, like us, is deeply entangled with China.”

As a result, he said, even countries as wary of China as the United States “will not risk economic ties nor join in a perverse struggle to re-erect the ‘Bamboo Curtain,’ this time by the West. We will be on our own.”

At 95, Kissinger, not surprisingly, takes the long view. Together, he said, the United States and China exert such power, and are capable of inflicting such unthinkable destruction, that they owe it to the world to find a path toward “partial co-operation.”

“We have to make the effort of moving in that direction,” he said.

Harking back to his session with Bannon, Kissinger added, “I cannot guarantee that that will be the result.”

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