Now the big bull is in China's shop. It risks doing substantial damage to its ambitions, both by accident and design, if it is not handled carefully.

The battle to come is not just over economic might, political influence and military reach. It will also rage over access to global resources such as energy, raw materials and water. Most critically, it will hinge on an issue vital to both sides - political and economic ideology.

As Secretary of State Hillary Rodham Clinton wrote in the magazine Foreign Policy last November, in an article provocatively titled America's Pacific Century, 'the future of politics will be decided in Asia ... and the United States will be right at the centre of the action'. The US has thrown down the gauntlet and, superficially at least, it looks like an unfair contest. It controls a third of the world's wealth and a quarter of the global economy with just 5 per cent of the population. Its share of military spending is equal to the rest of the world put together.

In comparison, China looks like a small fish. Its economy is roughly a third of the size, and measured per head, just a tenth as large. It is home to just 5 per cent of the world's wealth but 19 per cent of the people. China's defence budget is a sixth of the size of America's.

But the rivalry is as much about momentum as position. The US' share of the global economy has remained static for a generation and is expected to fall as it is forced to take control of its debts. Its massive defence budget is being cut.

In contrast, China's share of the world economy has more than doubled in the past 10 years and the country's defence budget continues to expand. It has become the largest user of energy in the world and the biggest buyer of many commodities. The market matters more - that is, it still offers growth - to most of its regional neighbours.

Moreover, while the US may have been top dog for decades, China was the biggest pooch for centuries. So China's resistance to America's play for power is partly about a stolen crown: it is fuelled by a strong and deepening sense of nationalism. China, unwilling to be cowed by the diplomatic belligerence of the US, has responded by saying that America is 'endangering peace' by its actions.

Despite the apparent views of many US politicians and diplomats, China also has considerable power. It is a huge buyer of US government bonds, helping to finance the massive US budget deficit and keeping the world's largest economy on track. It supplies a vast array of products which the US would find hard to buy elsewhere at any similar cost - inviting US inflation and product shortages in the event of any serious trade spat.

China could easily punch the wind out of the US economic recovery. Also, hundreds of the biggest US companies are invested in China, with billions of dollars of assets there.

For now, Beijing seems more frustrated than angry with US pronouncements. It sees itself as a victim of US injustice and hypocrisy - again. It thinks its voice is not being heard.

Here, it has a point. China's politicians watch in disbelief as their US counterparts demand sanctions for manipulating its currency because they also see the same congressmen encouraging the Fed to print money, lowering the value of the dollar.

The Chinese also hear US politicians accuse Chinese firms of competing unfairly, but then watch them stop China's biggest companies from investing in the US. China's state planners see the US encouraging them to adopt an economic free-market philosophy - but they also believe the model is flawed and look to the financial crisis and the greed of Wall Street as evidence of this.

From a Chinese perspective, the US military posturing in the South China Sea is seen as cosying up to the governments in the region, notably those in Taiwan, Thailand and Myanmar. Its determination to make the region an ideological battleground seems designed to provoke China further.

While Bush-era neo-cons once hoped to promote a Soviet-style collapse in China, this generation's leaders seem to want to upend China's regional relationships, challenge China's territorial claims and start a trade war. As a consequence, China is being drawn closer to rivals of the US, in South America, with the government in Iran and with political leaders in parts of Africa, widening the divisions still further.

For now, the change in US foreign policy, while inevitable, looks like bad news, certainly for China - and perhaps for the US, too.

The tone being set is all the more troubling when there are global and regional issues that need to be addressed - climate change, financial regulation, North Korea and Iran. There is a need for the two powers to co-operate, not squabble. More critical still, the new tone sets back the prospects for any global economic recovery.

How all this plays out in the coming months and years is hard to guess, of course. Cool heads may yet prevail.

But at an under-reported meeting of US private equity bosses and senior Chinese officials (hosted by the Chinese investment bank CICC in honour of former vice-prime minister, Zeng Peiyan) in New York on 18 November, the Chinese delivered a message that adds to the growing sense of concern about relations between the two nations.

'If your Congress passes a bill labelling us as currency manipulators, we will crush you,' said the Chinese. 'Please convey that message to your government on our behalf,' reported the Financial Times about the meeting.

China's geopolitical resurgence is looking more troubled that it did three months ago. But the battle for influence in Asia and the world has only just begun.

Graeme Maxton's latest book is titled The End of Progress: How Modern Economics Has Failed Us