What are the dangers in Americas continued demonization of China?

When Nixon first visited China, in 1972, the differences between the two countries were vast, in political and economic systems and of course in ideology. Yet they found common ground to work in mutually beneficial ways. Today the differences are arguably a lot smaller, and there are many areas in which the two can benefit from cooperation. After all, each is the others largest trading partner, and China has lent more than $1 trillion to the U.S. government by holding U.S. Treasury bills. Lets be honest: A rising China may be a threat to Americas economic and technological supremacy, but not to its national security, because China doesnt export its ideology or political system and doesnt seek regime change anywhere in the world. But it wont back off from its territorial claims, all of which predate the Peoples Republic of China. The real danger is the Taiwan issue. If the U.S. abandons the one-China policy and supports Taiwans independence, conflict will be inevitable, with unimaginable consequences for the world market.

This is an except from an interview conducted by Adi Ignatius for the Harvard Business Review.