In June, Philippine President Benigno Aquino condemned China for behaving like Nazi Germany in the way it was staking claim over vast areas of the South China Sea. Five months later, in November, Manila assured Beijing that the contentious maritime dispute would not be discussed during a regional summit that it was hosting.

The acquiescence to sweep things under the carpet belies true sentiments. Mr Aquino was probably still seething. So while he promised to be the perfect host at the Asia-Pacific Economic Cooperation Summit, it did not quite extend to Chinese President Xi Jinping, who was given the cold shoulder more than once.

Such passive-aggressive behaviour is perhaps one way that smaller neighbouring countries have sought to show their displeasure towards an increasingly assertive China. The other way is to seek solace from across the Pacific — the only other superpower that could protect them against the growing Chinese giant. 

This dovetails with the American “rebalance towards Asia”, and the United States seems more than happy to stay relevant in this region as it seeks to find its own balance of power with the world’s number two economy.

“The relationship between the emerging and the enduring superpower is the greatest geopolitical question of our time,” wrote historian and political writer Timothy Garton Ash in a column in The Guardian recently.

“If Washington and Beijing do not get it right, there will probably be war somewhere in Asia some time over the next decade. Vladimir Putin’s neo-imperialist Russia and the brutality of Islamic State (IS) are medium-sized regional challenges by comparison.”

Indeed, ties between China and the US underwent several significant twists and turns this year. There was the landmark meeting between Mr Xi and Mr Barack Obama in the US in September, which brought hopeful cooperation on climate change and cybersecurity. Some even compared Mr Xi’s visit with Mr Deng Xiaoping’s historic trip to the US in 1979 after both countries formalised relations.

But even as exchanges between both countries have deepened, relations have been marked more by antagonistic competition than by amicable cooperation. Look no further than the political hotbed of the South China Sea, to the economic tango of the US-led Trans-Pacific Partnership (TPP), which excludes China, and the China-inspired Asian Infrastructure Investment Bank, which excludes the US.

Even Mr Xi’s One Belt, One Road initiative to revitalise China’s land and sea trading routes from Asia to Europe is viewed as a challenge to the US.

“I would characterise Sino-US relations for 2015 as riding on a roller-coaster up and down without a clear direction,” Dr Forrest Tan, professor of Political Science at Cleveland State University, told TODAY.

Dr Tan, who has also taught in Chinese universities, added: “It seems to me that both governments are busy burying in specific disputes and letting the overall relationship be carried by the waves of on-going issues. Without strategic direction, I think the ship of US-China relations will sail into the dark sea for the next year.”

His bleak assessment is shared by other experts who point to the contentious issue of China’s island building on the South China Sea, which will continue to scar Sino-US relations. The latest skirmish is US navy patrols near the disputed islands to test freedom of navigation, with more of such voyages expected in the future.

This issue has also prompted neighbouring Asian countries to build up their military capabilities, noted Foreign Policy magazine. 

“Japan is jettisoning its decades of World War II pacifism. Communist Vietnam is buying arms from the US, its old enemy. The Philippines is inviting US forces back 25 years after kicking them out,” the magazine noted in a report early this month.

Some observers reckon relations are reaching a tipping point over the South China Sea, with the US and China locked in a great game of power rivalry. “I fear that the speculation about a possible military conflict could become a self-fulfilling prophecy,” said international security expert Lawrence Wilkerson, who served as chief of staff to former US Secretary of State Colin Powell, in an interview with the Asia Institute.

“The US or China could end up in a situation in which both parties, to avoid a loss of face, are forced to do what they said they would do. In the South China Sea — and in particular around the Spratly Islands — we see the greatest risk of a major confrontation.”

TAIWAN, CYBERSECURITY REMAIN THORNY ISSUES

Yet, other analysts also believe cool heads will prevail and both sides will not let tensions spiral out of control. 

“With many other policy priorities, neither the US nor China will allow the South China Sea issue to jeopardise overall bilateral relations,” said researcher Angela Poh from the S Rajaratnam School of International Studies (RSIS), in an RSIS commentary.

“What we see, therefore, are the US and China walking a very fine line, and engaging in diplomatic signalling, mixed with friendly gestures to manage the situation.”  

Even if a war is not fought at sea, online attacks can be equally damaging, with cybersecurity issues having the potential to harm relations, said Associate Professor Zhang Jian from Peking University’s School of Government. “I can see the possibility of some politician calling a future major Chinese cyber offensive to the US a ‘cyber Pearl Harbour’. The cyber issue is big and can be politicised easily and, most importantly, can be used to mobilise direct domestic anger against China,” he told TODAY.

In September, a top US intelligence official said he was sceptical that a new agreement between the two countries’ leaders on curbing economic cyber espionage would work, and as Chinese cyber espionage aimed at extracting US intellectual property was so pervasive, questions remain on the extent to which it was orchestrated by the Chinese government.

Despite the depths to which relations could plummet, Dr Zhang and other analysts note that growing economic dependence between China and the US demanded cooperation rather than conflict. China is now the biggest foreign holder of US Treasury notes, and bilateral trade between both countries exceeds US$500 billion (S$702 billion).

“Next year, both sides would stick to the status quo with China facing uncertain domestic economics, the US presidential election, and China’s leadership succession in 2017,” Dr Zhang noted. But what could unravel relations is the upcoming Taiwanese presidential elections next month. 

With the pro-independence Democratic Progressive Party (DPP) holding substantial leads in polls over the pro-Beijing Kuomintang (KMT), the possibility of military escalation in the Taiwan Straits hangs over the relationship between the US and China.

“The Taiwan issue has potential in pushing the bilateral relationship further down the roller coaster,” said Dr Tan. “It depends on how the DPP interacts with the mainland and the US.”

This month, Washington’s announcement that it would sell US$1.83 billion worth of arms to Taiwan drew a swift rebuke from China, which threatened to penalise the companies that made the armaments and summoned an American diplomat to register an official protest.

After years of relative calm under KMT’s Ma Ying-Jeou, what is worrying is that leaders in Washington could be unfamiliar in dealing with potential flashpoints between Taipei and Beijing, noted Mr Paul Haenle, director of the Carnegie-Tsinghua Center for Global Policy, in a recent seminar in Singapore.

But there is one clear uniting force for both countries and the world —the global fight against terror. China was drawn into the issue when its citizens were killed by militant group IS last month. This prompted Mr Xi to join the war on IS, saying: “China will strengthen cooperation with the international community, resolutely crack down on violent terrorist operations that devastate innocent lives, and safeguard world peace and security.”

NO PLAYBOOK TO GUIDE RELATIONSHIP

How cooperation on security and intelligence will affect its relations with the US is still unclear. What is clear is that both countries have such a complex and convoluted relationship that every other country will be watching to see how it plays out next year.

Former US secretary of state and China expert Henry Kissinger, who paved the way for the US and China to normalise ties more than 40 years ago, described Sino-US relations as a “co-evolution”. Asked to elaborate in an interview, he said: “What it means is we should not require China to act like we do. And China should not expect us to act like China does in all respects. 

“What we should expect from each other or try to achieve is that we each develop our societies in a way we think the most appropriate. But as we do this, we keep in mind that we move towards similar and sometimes identical goals. So we possibly progress side by side, but not necessarily to the same music.”

During Mr Xi’s visit to the US in September, he coined the phrase “a new model of great power relations” as a guide to avoid major conflicts in Sino-US ties going forward. Yet, deep rivalry and mistrust remain.

“Neither country has any playbook to guide such a relationship,” said Mr David Shambaugh, professor of political science and international affairs at George Washington University, in a lecture in Hong Kong.

Referring to Mr Kissinger’s vision of co-evolution, he said: “It is not at all clear to me that the respective political cultures and existing political systems, national identities, social values and world views will afford such a strategic grand bargain today. Thus, these two great nations are likely to find it increasingly difficult to coexist — yet, they must. However fraught, this is a marriage in which divorce is not an option. Divorce means war.”

As in any relationship, there will be those who are caught in the middle. In this instance, ASEAN countries are squeezed by both sides on issues relating to the South China Sea and beyond. But many wisely choose not to take sides, or at least not too obviously, as nobody wants to hurt relations with either big power. 

In a sign of how sensitive the issue can be, China’s Foreign Ministry said early this month that Washington’s move to deploy a P-8 Poseidon surveillance plane in Singapore was aimed at militarising the region. The Chinese Defence Ministry added that it was paying “close attention” to the issue and hoped the move did not harm regional stability.

“The South China Sea will become an important litmus test for ASEAN, and will determine the dynamics of ASEAN’s relationship with the big powers. Caving in to either side for short-term interests will only result in ASEAN losing its unity and credibility. The South China Sea, and this entire region, will truly become a playground for the big powers if this happens,” said RSIS’ Ms Poh.

On a broader level, Ms Poh told TODAY that it is crucial to reduce tensions and avoid militarisation in this immediate region. “China needs to keep in mind that its reclamation activities, regardless of intentions, is causing significant anxiety in the region, potentially resulting in a security dilemma. At the same time, regional countries and the US need to avoid over-reacting to China’s every move,” she said.