The ramifications would run far beyond the damage inflicted on both countries – which at its worst could ultimately involve a ‘hot’ war in the Asia Pacific. It would be felt across virtually every other area of policy, as a world order characterised by increasingly unleavened great power competition weakened or unravelled most of the global rules, regimes and institutions that have emerged since the end of the first Cold War, from free trade to non-proliferation regimes, from development policy to the UNSC.

This paper argues that economic interdependence and deft diplomacy are no longer going to be sufficient to keep Sino-US relations on track. It sets out the developments in Washington this year that have led to the US embarking on what looks in Beijing like the early stages of a containment policy, the increasingly ideological quality of the divisions between the two sides, and the hedging strategy with which China has responded. It argues that without early intervention and the establishmentof a new relationship framework that can stably encompass these issues – which implies some difficult choices for both sides – 2005 is, in retrospect, more likely to be described as the first year of the Cold War than as a prelude to it.