The winners and losers of the last year tell a story of turbulence and change in a year that saw the world make it through 12 more months of global pandemic and simmering geopolitical tensions, without resolving either issue.

During the Cold War, Europe was America’s strategic priority. East Asia was largely a sideshow, even though the United States fought bloody wars in Korea and Vietnam, and also provided security for Japan, South Korea, and Taiwan.

Americans like to think the United States won the Cold War and they nostalgically believe the same approach will work with China. It won’t. In fact, healthy China-U.S. relations depend on Washington’s moving away from the myth.

High-level dialogues in 2021 between China and the United State clarified their positions. Now it’s imperative that the two rivals avoid a new cold war by engaging in substantive working-level talks.

Two presidents take a stand against a new cold war in a virtual summit. The old friends sought to renew relations and move forward — accepting competition but shunning conflict. How to achieve that is the big question.

The fallout of the AUKUS deal has the potential to alter the landscape of relationships in the Pacific region. By entering a nuclear arms deal with Australia, the U.S. and U.K. are applying pressure in the showdown between China and its Western counterparts.

In the year 2034, the United States and China become embroiled in a series of military conflicts that escalate into a devastating tactical nuclear war. Other countries – including Russia, Iran, and India – get involved. Suddenly, the world is on the verge of World War III.

The United States and China are embroiled in a contest that might prove more enduring, more wide-ranging, and more intense than any other international competi­tion in modern history, including the Cold War. In both countries, fears have grown that the contest might escalate into open conflict.

In the 1990s, the famous concept of “soft power” was put forward by Joseph Nye, professor and former dean of the Kennedy School of Government at Harvard University. It greatly influenced the foreign policy of the Obama administration and became an important concept promoted by the State Department. In his view, a country’s comprehensive national power is divided into hard power and soft power, which mainly includes “cultural attraction, political value attraction and the ability to shape international rules and decide political issues”.

The deterioration of China-U.S. relations has not ended, and a turnaround is unlikely. Given the intense frictions of recent years, both countries have built up a fixed mindset about diplomatic strategy that has been incorporated in their domestic politics. Superb diplomatic skills will be needed to avert confrontation.