The US-China relationship is ending 2016 on its most ominous note in years. President-elect Donald Trump has questioned the one-China policy that has been the default American position and angered mainland China by taking a congratulatory call from Taiwanese president Tsai Ing-Wen. China has reciprocated with barely veiled aggression, adding visible anti-aircraft systems to the artificial islands it has dredged out of the South China Sea and seizing an underwater American drone from under the nose of a U.S. warship.
The big question for 2017 is whether the two sides will let the relationship unravel further. Will their cool war become more “war” and less “cool”?
Until now, the rival strategic interests of China and the US have been mitigated by shared economic interests. But economic cooperation can quickly end over disagreements on currency and trade – reducing the Sino-American relationship to raw, zero-sum geopolitical competition.
Neither nation’s leader can easily avoid this looming conflict; they both face domestic pressure. Trump made campaign commitments to change the dynamic with China, and President Xi Jinping is under pressure to show that his “Chinese dream” is progressing. The most likely outcome is substantial worsening of relations between the world’s last superpower and its fastest-rising rival.