| Greetings, I'm Andy Browne, Editorial Director of the Bloomberg New Economy. In his famous "long telegram" to the U.S. State Department, the legendary American diplomat George F. Kennan set out his Cold War strategy to contain the Soviet Union. World Communism, he wrote, feeds on diseased tissue. "Much depends on health and vigor of our own society."  As the U.S. gears up to confront China, Kennan's 8,000-word cable from Moscow in 1946 should act as both a warning and a guide. Kennan's insight was that Washington's ability to stand up to Moscow depended in large part on upholding its open values and improving domestic "self-confidence, discipline, morale and community spirit." He argued against open confrontation in favor of a strategy of frustrating Soviet activities around the world: This was the essence of Containment. Last week's Group of 20 summit meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, featured a concocted bonhomie — ahead of the meeting, Xi called Trump "my friend"; Trump returned the compliment by hailing Xi as a "brilliant man" and one of the greatest Chinese leaders in 200 years — and an equally contrived truce in the trade war. The suspension of hostilities depends in large part on Trump's vague promises to ease devastating sanctions on Huawei Technologies Co. Beijing will most likely play along with this game of pretend for as long as it can, while making comprehensive plans for a long-term adversarial relationship, including a full economic rupture.  A new Cold War is on the way, one for which the U.S. is poorly prepared. Kennan saw the dangers of overblown fears about the Soviet Union. He cautioned against "hysterical anti-Sovietism," and urged U.S. leaders to talk about the challenge from the Soviet Union in a "realistic and matter-of-fact" way, even if Stalin's empire sought to destroy the U.S., subvert its allies and impose its brutal ideology on the world. China seeks none of those outcomes — it signs up with varying degrees of enthusiasm to most of the institutions of the U.S.-led liberal order, except the human-rights regime — yet the White House portrays China as a revisionist power and an existential threat. Kennan's current successor as director of policy planning at the State Department, Kiron Skinner, describes the contest with China as a clash of civilizations. We're in the grip of a new Red Scare: Chinese students in America are unfairly branded as potential spies, and ethnic Chinese researchers and scientists often face baseless suspicions about their loyalties. Elite opinion in the U.S. has turned decisively against a decades-long policy of engagement with the People's Republic. In part, this is a reaction to profound disillusion among those who hoped that closer integration of the two economies would encourage liberal change in Beijing. Instead, they ended up with a regime that rounds up human-rights lawyers, detains large portions of its ethnic Uighurs in re-education camps, obsessively monitors its population and seeks to influence opinion in open societies in favor of its repressive policies. Hawks in Washington are now trying to block China's rise by decoupling the two economies and weaponizing trade. In doing so, however, they are every bit as naive as those who dreamed of reforming China through trade and investment: Washington is no more able to shape domestic Chinese politics than to derail the country's economic and military ascendancy. The steely, thoughtful and determined men who run China have a detailed vision of their country's economic future, and its place in the world. Their response to Washington's hard turn will be to further open up selected areas of the economy, particularly financial services, to keep the hopes of foreign investors alive. But they will simultaneously double-down on technological self-reliance, especially in choke points like semiconductors, whatever the costs. Trump's threat to cripple Huawei by cutting off its access to U.S. chips cannot be undone; Chinese tech companies will never again trust American supplies of critical components.  Expect, too, that China will show a friendlier face externally to try to split the U.S. from its friends and allies. It has already demonstrated its capacity to course-correct by recalibrating its signature Belt and Road initiative to take account of criticisms that the project amounts to "debt trap diplomacy" and a new form of colonialism. Belt and Road will become an even more crucial means for China to enlarge its economic influence and diversify its investment and trade relationships. The U.S. needs to be similarly deliberate. To win, Kennan argued, America must project "a more positive and constructive picture of the sort of world we would like to see." Trump's poisonously divisive domestic politics and his bullying, chaotic and spur-of-the-moment style of international diplomacy are exactly the opposite of Kennan's prescriptions. So, too, is Trump's assault on the institutions that underpin American strength, from its domestic news media and courts to international alliances. The greatest danger, Kennan wrote, "is that we shall allow ourselves to become like those with whom we are coping." Like Turning Points? Subscribe to Bloomberg All Access. You'll get our unmatched global news coverage and two premium daily newsletters, The Bloomberg Open and The Bloomberg Close, and much, much more. 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