In his new book, The Avoidable War?, former Australian Prime Minister Kevin Rudd demystifies the actions of the U.S. and China, explaining and translating them for the benefit of the other. Geopolitical disaster is still avoidable, but only if these two giants can find a way to coexist without betraying their core interests through what Rudd calls “managed strategic competition.” Should they fail, down that path lies the possibility of a war that could rewrite the future of both countries, and the world.

Something is happening in China that the West doesn’t understand. In recent months Beijing killed the country’s $120 billion private tutoring sector and slapped hefty fines on tech firms Tencent and Alibaba. Chinese executives have been summoned to the capitol to “self-rectify their misconduct” and billionaires have begun donating to charitable causes in what President Xi Jinping calls “tertiary income redistribution.” China’s top six technology stocks have lost more than $1.1 trillion in value in the past six months as investors scramble to figure out what is going on.

China, as part of its plans to restart its economy, has already approved the construction of new coal-fired power plants accounting for some 17 gigawatts of energy this year, sending a collective shiver down the spines of environmentalists.

The saber rattling from both Beijing and Washington has become strident, uncompromising, and seemingly unending.

Given China's failure to follow through on the marketization policies that it announced seven years ago, it is reasonable to be suspicious of the government's latest reform push. Much will depend on what Chinese leaders fear more: disruptive change, or a creeping malaise of their own making.

The wider world should show sympathy and express solidarity with the long-suffering Chinese people. These are ugly times, and the racism implicit (and sometimes explicit) in many responses to Chinese people around the world makes me question just how far we have really come as a human family. Too many people beyond China’s shores seem to have forgotten another eternal principle: “No man is an island, Entire of itself.”

Australia has become the complacent country. Complacent about its future economic competitiveness. Complacent about climate change. Complacent about how to navigate our future in the region given China’s rise, America’s response and a neighbourhood increasingly torn between the two. Complacent too about the gradual erosion of our democracy itself through a growing “pay for play” culture from financial donations to political parties, an increasing assault on the independence of the public service and the abuse of monopolistic media power.

Making sense of the U.S.-China trade war is difficult in itself. Making sense of how it may provoke a wider economic "decoupling," and impact the long-term strategic relationship between Beijing and Washington, is more difficult again.

The uncomfortable truth is that the United States and China countries face a deepeningdivergence of values and interests. The economic and military gap between them is narrowing, and both recognize that their mastery of high technologies of the future (of which artificial intelligence is but one) will ultimately determine their future claims to dominant superpower status. Given these realities, it is difficult to imagine a new bilateral relationship that will be based on policy principles substantive enough to prevent the two countries from gradually sliding in the direction of crisis, conflict or even war.