Last year, when China broke off military-to-military talks after the Obama administration’s long-expected sale of defensive arms to Taiwan, a high American official asked his Chinese counterpart why China reacted so strongly to something it had accepted in the past. The answer: “Because we were weak then and now we are strong.”

On a recent visit to Beijing, I asked a Chinese expert what was behind the new assertiveness in China’s foreign policy. His answer: “After the financial crisis, many Chinese believe we are rising and the U.S. is declining.”
These Chinese are not alone. A recent poll shows there are more Americans who believe China will be the dominant power in 20 years than believe the U.S. will retain that position.
Some analysts go further and argue that China’s rise will result in a clash similar to that between a rising Germany and a hegemonic Britain that led to World War I a century ago.
One should be skeptical about such dire projections. China still has a long way to go to catch up in military, economic and soft-power resources. In contrast, by 1900, Germany had surpassed Britain. Even if Chinese gross domestic product passes that of the U.S. at some point in the 2020s, the two economies would not be equal. China would still have a vast underdeveloped countryside, and it would almost certainly have begun to face demographic problems and slowing economic growth.
As some Chinese say, they fear they will grow old before growing rich. China is a long way from posing the kind of challenge to America that the Kaiser’s Germany posed when it passed Britain.
But many Chinese do not see the world this way. They believe that the recession of 2008 represented a shift in the balance of world power, and that China should be less deferential to a declining U.S. This overconfident power assessment has contributed to a more assertive Chinese foreign policy in the last two years. The shift in perceptions seems to have emboldened the Chinese government, even though the judgment is wrong.
For years, China followed the advice of Deng Xiaoping to keep a low profile. However, with its successful economic recovery from the recession and 10% growth rate, China passed Japan as the world’s second-largest economy last year, and many in China pressed for a stronger foreign policy.
Some blame this on President Hu Jintao, but that view is too simple. The top leaders still want to follow Deng’s strategy of not rocking the boat, but they feel pressured from below by rising nationalism, both in the bureaucracy and the blogosphere. But it is likely that China’s leaders will draw back somewhat from the overly assertive posture that has proved so costly.
Hu’s stated desire to cooperate on terrorism, nonproliferation and clean energy should help reduce  tensions with the U.S., but powerful domestic interest groups in export industries and the People’s Liberation Army want to limit economic and military co-operation.
And most important, given the increasing nationalism of the Chinese people that one sees on display in the blogosphere, it will be difficult for top Chinese leaders to change their policies dramatically.
Hu’s state visit to Washington in January helped improve matters, but the relationship will remain difficult as long as many Chinese suffer from hubris based on nationalism and a mistaken belief in American decline.
Given that China and the U.S. face global challenges such as financial stability, cyber security and climate change, the two countries have much to gain from working together.
Unfortunately, faulty power assessments have created hubris among some Chinese, and unnecessary fear of decline among some Americans, and these shifts in perception make cooperation difficult.
Any American compromise is read in Beijing as confirmation of American weakness. But with more realistic projections and policies, China and America need not repeat the disastrous experience of Germany and Britain a century ago.
(Source: Los Angeles Times) ***Joseph S Nye Jr. is a professor at Harvard’s John F Kennedy School of Government and author of The Future of Power