When it comes to China, the US need to figure out which fights are principled, and which fights are petty

• John Kerry was in China this week discussing climate change and some people are upset about it.
• They think cooperation on that issue could stop the US from being aggressive with Beijing about a host of other issues.
• They're delusional.
• This is an opinion column. The thoughts expressed are those of the author.
• See more stories on Insider's business page.

President Joe Biden's special envoy on climate, John Kerry, went to Shanghai this week to discuss how best the two largest economies in the world can address the threat of climate change. Despite the meeting being pretty standard stuff, it still has some US-China watchers completely losing their minds.

This freak out crew would prefer to have cordial relations between the two countries end tomorrow and instead have the US put maximum pressure on the Chinese Communist Party. They would prefer a world completely split in two, divided by a "digital iron curtain" with the US and fellow democracies on one side, and China, Russia, and their allies on the other. Economic ties would be cut, the flow of people would slow to a trickle, and the prospect of war would heighten across the world.

To them, Kerry and his message of cooperation on climate change could derail that future. That's a false choice, but despite it's absurdity the idea has become pervasive. Over at the Brookings Institution they decided that Kerry could go rogue, becoming a one-man wrecking ball for the entire government's more muscular China policy. This is ridiculous on its face. Ultimately it is President Biden who will decide the direction of our China policy - and, as one former Obama administration Asia hand told me dismissing this theory, "John Kerry is no panda hugger."

This is a delicate moment. The boundaries of the US-China relationship are being redrawn. We are watching trust rapidly dissipate between world powers in real time, and we shouldn't waste what little trust we have now on empty antagonism. There will likely come a time when we wish we had that trust back.

A bomb and the time bomb

In the 1950s and 1960s the end of human civilization was staring its destruction in the face in the form of the nuclear bomb. The bomb was getting bigger and deadlier; spreading to more countries; and had already laid waste to cities and contaminated populations.

And so in 1963 during some of the most frigid times of the Cold War between the United States and USSR, the key nuclear powers of the time (which also included the United Kingdom), signed the Limited Testing Ban Treaty. The treaty regulated how and where countries could test their bombs, and it set up an emergency line of communication between powers to avert disaster - "the hotline."

This all amounted to one critical thread of cooperation between the US and USSR during an otherwise entirely uncooperative period. The Cold War went on, but the prospect of nuclear winter shrank.

Today the threat facing human civilization is climate change, and the two countries that most need to work together to solve it - the US and China - are on the verge of another conflict that will force the planet to choose sides. In both countries there are people who are calling for a cessation of cooperative interactions. To them, every cooperative meeting is a Trojan Horse, during which one side will magically convince the other to forget every other issue pulling them apart.

But what we learned from the Cold War is that the US and an adversarial superpower are perfectly capable of sustaining fierce competition, while also cooperating enough to keep the world from destroying itself. When it comes to the US and China today, not only are we not in as dark a place as we were with the USSR in 1963, but we also have far more economic and business ties to break before we get there.

Until we're serious about breaking those ties entirely (we're not yet), we shouldn't act like we are. That's called posturing, and the United States ought to be above that.

That doesn't mean we aren't aggressive regarding issues that concern us - like Xinjiang, Hong Kong, North Korea, and Taiwan. It does not mean we aren't aggressive when China bullies our allies, like Australia, or engages in cyber hacking. It does not shrink our commitment to democracy. But it does mean finding ways to cooperate where we can and keeping lines of communication open.

I mean my God, even in 1963 they had the hotline.

Cooperation

Here's how I know we're not serious about cutting commercial and social ties with China just yet. Right now the Senate Foreign Relations Committee is working on a sweeping bipartisan bill to address China's rising power. In it there's hundreds of million of dollars for defense and programs to country China's telecommunications rise. But for companies that want to move their operations and supply lines out of China there's just $15 million. The US government loses $15 million in the couch cushions. That is not serious money.

But what people who do business in China will tell you is that getting public data, or having the mobility and access to interview customers to do business there, is getting harder. On March 19, Anne Stevenson-Yang, founder of China-focused investment firm J Capital Research Ltd testified before the US-China Economic and Security Review Commission on Capitol Hill.

She told attendees that more and more of China is state run - that it's not opening it's economy anymore, that it's closing it. Public economic data that used to be easy to get started evaporating back in 2015, shortly after Chinese President Xi Jinping took power. This back pedaling does not just make Chinese society more brittle, she argued, but it also creates incentives in the Chinese economy that put investors and multinational corporations at risk. The solution, in some of those instances, is more cooperation - not less.

"The practical remedy for faked data, for example, on a corporate, industrial, and macroeconomic level, is to grant American researchers unfettered access to conduct surveys, interview individuals, and review financial records of all sorts in a legal proceeding, including tax records, audit papers, invoices, and communications," she said. "A key impediment to such data collection is China's law forbidding independent surveys. Survey teams need to be able to access respondents within a framework of privacy law but not one of data supervision."

Achieving that requires cooperation, but that doesn't mean Stevenson-Yang isn't realistic about where it is not possible. For example, she recommends treating Huawei, ZTE, and other Chinese network gear as spyware and supports technology export restrictions.

If China closes and gradually makes itself a terrible place to do business, that is on China. It is on the US government to ensure that our multinational corporations are ethical, transparent, and consider our domestic interests at the center of their business. In the meantime the most productive thing to do is engage with China to protect investors and US businesses as best we can.

Besides, this is America and we do capitalism. If you want to do business in China and don't mind the uncertainty of having your product randomly barred from military complexes and personnel; or you want to deal with your company being harassed and boycotted for not endorsing cotton from Xinjiang or whatever, knock yourself out.

Separating the principled from the petty

In this fragile moment, there is a danger of confusing the principled with the petty. When that happens, any slight can lead to a stand off.

There are petty new features of this more antagonistic relationship we all just have to get used to rolling off our backs. For example, China forced the world to get used to its hyper-aggressive "Wolf Warrior" diplomacy, and now it has to get used to a US strategy that it dislikes - US led multilateralism. To China, when we rally our allies to make joint statements about things like human rights abuses in Xinjiang, that's bullying.

Too bad. When the US is run correctly, that's how we do things. Beijing will have to get over it.

This is to make space for the issues that Beijing and Washington cannot get over, most of which was discussed between President Biden and Japanese Prime Minister Yoshihide Suga on Friday. Suga will be the first foreign leader to visit the White House since Biden took office. It is a sign of the gravity of the matters they have to discuss - like North Korea, Taiwan and a maintaining "free and open Indo-Pacific."

Perhaps it's a coincidence that Kerry's and Suga's meetings fall at the same time, perhaps it's not. Both are meant to address exigent situations that demand cooperation at highest levels of government and both must be had. Until the day comes when we are serious about ending the US-China relationship - and that day very well may come - we should continue to seek cooperation where it benefits the people and institutions of the United States of America. Anything else is an exercise in fantasy, or worse - just posturing.