In recent months, Barack Obama has adopted a seemingly innovative 'soft containment' strategy, and the core is to reconcile two contradictory priorities: pursuing a universalist world policy in ideal and maintaining American exceptionalism in reality. Put another way, he wants to rejuvenate the American empire, albeit an insolvent one, by drinking from a universalist fountain of youth, much like strengthening the Roman Empire on the ideological basis of ancient Greece.

This has resulted in the start of a new-style cold war between China and the US. But this cold war is not so much based on the 20th- century ideological dichotomy of communist dictatorship versus democratic freedom, as on a much deeper chasm - the misunderstandings between two cultures.

To begin with, there is a misreading of history. When Hillary Rodham Clinton blasted China's human rights record recently, she claimed that Beijing was on a 'fool's errand', trying to stop the process of history. But what and whose history was she talking about? Apparently, she was referring to a history after the European Enlightenment, during which the concepts of democracy and human rights became a political theology. Of course, the United States itself is a product of the Enlightenment, so this way of thinking and reasoning comes naturally. But the Chinese prefer to remember pre-Enlightenment history, as well.

The first ideological encounter between China and the West took place in the late 16th and early 17th centuries, and the first debate about the differences and common ground between the two cultures was a serious one. Pioneered by the Jesuit priests, such as Matteo Ricci, a healthy dialogue about fundamental aspects of the two cultures yielded significant results, which prompted the Vatican to consider an 'accommodationist' approach. Unfortunately, this extraordinary achievement was destroyed by European power politics in a long struggle between the defeated accommodationists and their foes, centred on a controversy over Chinese religious rites.

For the Chinese, a real debate today on fundamental cultural values would mean restarting the original one with the Renaissance humanists, but this is hardly possible between Washington and Beijing, because the US has no collective memory about the Renaissance and remains the key defender of its counter-culture, the Enlightenment.

In the practical policy arena, there is also a habitual misreading of some crucial specifics in history, which could result in dangerous consequences. Armed with seemingly superior values, the Americans naturally think they can dictate the process of the 'rise of China', while the Chinese view as highly problematic the very notion of the nation's 'rise'. Such a concept assumes at least two things: first, that China has not occupied the position as the most economically prosperous nation before and, second, that China's recent progress is primarily due to the Western-dominated globalisation process.

These assumptions are historically inaccurate. Not only did China experience sustained economic prosperity for centuries, it was also quite accustomed to its position as a trade-surplus country and leading holder of reserve currencies (silver and gold) up until the opium war. As late as 1820, Chinese gross domestic product was estimated to be more than 30 per cent of the global total. Today, despite all the sensation caused by the 'rise of China', that figure is less than 10 per cent.

Hence, for China, its recent success is part of an ongoing process of cultural and historical restoration after a 160-year lapse.

But for the US, seeing China as a newly rising power or 'emerging market' leads to the logical conclusion that China's 'rise' and its negative consequences must be contained by forcing it to embrace Western value systems. Thus, the reasoning goes, since China has embraced the market economy that originated in the West - a notion that is itself problematic - political democratisation must follow. If not, China should be seen as another Imperial Germany at the end of the 19th century, a dangerous authoritarian economic dynamo with global expansionist ambitions. Such is the mentality behind the new cold war strategy.

The misreading of each other's minds in the security relationship is even more alarming. While traditional Chinese culture emphasises preparation for a potential attack by building sufficient capability, or the 'offensive defence' approach, the US is accustomed to an equally pre-emptive approach; the difference is, the US strategy is euphemistically called 'deterrence'.

Thus, a vicious strategic cycle could result: China's military build-up will be seen automatically as having aggressive intentions, though history does not bear any serious evidence of expansionist tendencies in the Chinese state. At the same time, the US 'deterrence' effort around China, even though this term confers higher moral value, could easily be seen by the Chinese as a military encirclement.

It is precisely because the two nations have so far been unable to transcend this vicious psychological cycle that Kissinger is worried about the long-term prospects for the relationship. And he is, of course, right.

Lanxin Xiang is professor of international history and politics at the Graduate Institute of International and Development Studies in Geneva