Over many years, the United States and China have managed their relations in a manner of peaceful coexistence.
While they are rivals in economic, diplomatic, political, and military/naval terms, they have an understanding that they compete in the global economy, and in international diplomatic influence, but avoid military/naval confrontation.
Washington and Beijing will never admit this in any policy statement because global superpowers never acknowledge any limitations on their power and global reach.
By and large, they respect each other’s spheres of influence. For example, China can trade and provide loans and aid in Latin America and the Caribbean, but cannot establish a military alliance or naval base in this region. Meanwhile, the US, despite the goading of Japan and Korea, tolerates Chinese expansion in the South China Sea.
One of the major planks in the coexistence template is that the US, since 1979, accepts the One China Policy, meaning that the People’s Republic of China (PRC) is recognised as China. This put an end to the claim that the Administration in the small island of Taiwan was the Government of mainland China in exile. Simultaneously, the PRC understands that, regardless of the validity of its claim that Taiwan is a breakaway rogue province of China, the US would not stand by and allow China to conquer the island by use of military and naval force.
While Taiwan and China are close-linked economies in private investment and trade, the US and China are economically interdependent and neither wants anything to disturb trade and investment.
China, which holds over 60 per cent of US Treasury paper—vital to financing the US budget and trade deficit—wants a prosperous, growing US economy as an export market and an outlet for investment.
At the same time, Taiwan spends a considerable amount buying arms from the US. In the Caribbean, the fierce rivalry between China and Taiwan over diplomatic recognition has seen both providing large amounts of financial aid to regional states.
This has resulted in some governments in the Caribbean recognising Taiwan in exchange for lavish amounts of money.
Both China and the US understand that Taiwan is not a place over which to “draw a line in the sand” because it is not worth fighting about. It is against that background that the decision by US President-elect Donald Trump to receive a call from the president of Taiwan is being regarded as thoughtless.
So far, the Chinese leadership have not overreacted, opting only to file a complaint. Mr Trump, in response, launched a tirade against China on his favourite social media platform, Twitter.
We hope that this kind of action is a one-off mistake and does not portend a strategy. The world needs peaceful coexistence, diplomatic cooperation, and economic expansion between the US and China.