China marks the 40th anniversary of diplomatic relations with the United States on Tuesday, with a tit-for-tat tariff trade dispute between the world's two major economies showing few signs of disappearing in 2019.

The conflict sparked by U.S. President Donald Trump, who has urged China to reduce its massive trade surplus with the United States and rectify the country's alleged unfair business practices, has given rise to security and diplomatic tensions.

Concerns have been intensifying that Beijing and Washington could begin to engage in a Cold War-like rivalry this year.

On Jan. 1, 1979, the United States forged diplomatic ties with the Peoples' Republic of China while cutting relations with the Republic of China on Taiwan, 30 years after mainland China's Communist Party came to power.

(Chinese Deputy Premier Deng Xiaoping and U.S. President Jimmy Carter sign documents in Washington D.C. on Jan. 31, 1979)
[Corbis/Getty/Kyodo]

During the Cold War in the late 20th century, with the United States pitted against the Soviet Union, Washington sought cooperation with China, believing that the Asian communist country would liberalize its economy and open its market further.

In 1978, China launched its "reform and opening-up" policy designed to develop a market economy under the ruling Communist Party. The following year, the United States surprisingly opened diplomatic ties with the country.

Sino-U.S. relations, however, deteriorated in the wake of the pro-democracy protests and military crackdown in Beijing's Tiananmen Square in 1989, the same year the United States and the Soviet Union declared the end of the Cold War.

Afterward, Washington and Beijing managed to maintain a cooperative approach, even though they were divided over human rights, business and security issues, mainly in consideration of their own economic benefits.

In 2001, China, whose economy had expanded sharply by boosting its exports to the United States, joined the World Trade Organization -- led by Washington and other free trade-oriented Western nations -- and in 2010 it overtook Japan as the world's second-biggest economy.

Beijing has also become the world's largest holder of U.S. government bonds since 2008, suggesting the United States has been more dependent on China's fast-growing market.

China, meanwhile, has shied away from active political and economic structural reforms despite U.S. hopes and it has stepped up its military buildup in the resource-rich waters of the South China Sea -- home to some of the world's busiest shipping lanes.

At the Communist Party's twice-a-decade congress in October 2017, President Xi Jinping pledged to make China a "great modern socialist country" that is a "global leader in terms of composite national strength and international influence."

The administration of Trump, who has committed to realizing his iconic "Make America Great Again" promise since taking office in January 2017, has shown signs it is serious about containing China's regional and global economic and military influence.

Many foreign affairs experts say U.S. Vice President Mike Pence's speech in October has heralded a Cold War-like trade war between Washington and Beijing.

"America had hoped that economic liberalization would bring China into a greater partnership with us and with the world. Instead, China has chosen economic aggression, which has in turn emboldened its growing military," Pence said.

"Across the nation, the American people are growing in vigilance, with a newfound appreciation for our administration's actions and the president's leadership to reset America's economic and strategic relationship with China," Pence added.

So far, Washington has imposed tariffs of up to 25 percent on $250 billion of Chinese imports -- or about half the goods it imports from China each year -- in response to Beijing's alleged intellectual property and technology theft, as well as other trade complaints.

At their summit in Buenos Aires on Dec. 1, Xi and Trump agreed that the United States and China will hold off on imposing further tariffs on each other's imports and try to complete talks on technology and intellectual property rights issues within 90 days.

But Washington warned at the time that "if at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent," indicating that a failure to finish negotiations will rekindle trade strains.

Sino-U.S. ties, meanwhile, have been dealt a further blow after Canadian authorities arrested the chief financial officer of China's telecommunication giant Huawei Technologies Co. in Vancouver on Dec. 1 at the request of Washington.

The move is apparently aimed at undermining the "Made in China 2025" blueprint, under which Xi's leadership has been attempting to create global leaders in robotics, artificial intelligence and other advanced technologies at the state's initiative.

Late last month, the Chinese and U.S. presidents held telephone talks, with Trump saying on Twitter, "Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!"

In early January, a U.S. trade team is expected to visit China to hold a vice-ministerial-level meeting, but a diplomatic source said that it is "very unlikely" that the United States and China will finalize their trade negotiations within 2019.