Beijing is attempting to straddle a fine line with Washington as it seeks to mollify domestic appetite for hardline policies without causing irrevocable damage to the relationship.
Analysts say that despite the “Wolf Warrior” attitude from Chinese diplomats, official rhetoric and online nationalists, Beijing has stopped short of overly provocative steps and has not, or cannot, retaliate with equal force to American diplomatic volleys.
Tensions flared last week when the US ordered China’s consulate in Houston to close within 72 hours over alleged espionage activities. Beijing reacted by closing the American consulate in Chengdu, rather than shuttering high-profile offices like the one in Wuhan that was temporarily closed during the pandemic or more significant US consulates in Shanghai or Hong Kong.
Tensions between China and the US began to simmer when, in mid-2018, Washington fired the first shots in a trade war that continues to this day. Although US President Donald Trump has dismissed further trade talks with China, Beijing maintained it was still committed to the “phase one” trade deal the two sides signed in January.
Relations have only worsened as the major powers clashed over technological competition, corporate espionage, the coronavirus pandemic and Beijing’s actions in Hong Kong, Xinjiang, Taiwan, and the South China Sea.
Global trade already was depressed by the two-year-old tariff war between the world’s two largest economies and the a German official already warns of "Cold War 2.0".