From the start of the COVID-19 outbreak, the Prime Minister said this was not a time for ideology. He took a pragmatic approach and shelved conservative shibboleths abut small government and limited intervention.

The man who had preached that deficits and debts were plunging the Australian economy over a cliff, now put the economy into reverse and bailed out those Australians devastated by the lockdown. The latest national accounts figures showing we have emerged quickly from recession proves he was right.

So why not try the same approach with China?

Instead, Morrison talks more about ideology and values. He has framed this as an existential crisis. China is targeting us, he says, because of who we are.

Beijing is certainly playing its part. This is about their values too: authoritarian and anti-liberal. The Chinese Communist Party is everything we are not.

How do we possibly restore calm when both countries are making demands of each other that neither can meet?

Yet the two nations cannot avoid each other and can’t live as they are without each other.

China has powered its economy with Australian resources, especially iron ore and coal.

Australia has grown rich off China’s growth. It is by a long way our biggest trading partner. And if China turns on us, ordinary Australians hurt — just ask wine makers or crayfish farmers.

One in five Australian jobs depend on exports. As much as Treasurer Josh Frydenberg says the Australian consumer is the backbone of the economy, people can’t spend if they are unemployed.

If both sides make this dispute about ideology — about who we are — then we will pay a price.

China is a great power: an indispensable nation. It is the biggest engine of global economic growth and in this decade it will surpass the United States as the biggest economy in the world.

Donald Trump brought on a trade war with China and suffered: 200,000 Americans lost their jobs.

Australia is not going to win a diplomatic or trade spat with its biggest trading partner, a massive nation that can now project its power from Asia to the Pacific to Europe and Africa.

This increasingly toxic dispute is not in Australia’s interests and was not driven purely by standing up for Australian values.

The Morrison Government has followed an American line on China that has gone from competition and cooperation to confrontation.

The US has absolutely framed this as ideological: about us and them, the American people and the Chinese people. US Secretary of State Mike Pompeo said in a speech this year that America “opened our arms to Chinese citizens, only to see the Chinese Communist Party exploit our free and open society”.

Pompeo said China’s leader Xi Jinping “is a true believer in a bankrupt totalitarian ideology”.

In Pompeo’s words, China can’t be treated as “a normal country” and he expected America’s allies to do the same.

“We must start by changing how our people and our partners perceive the Chinese Communist Party,” he said.

The Australian Government certainly got the message. Australia is now caught in the crosshairs of a big power battle that is out of our weight division.

But just as Australia would not follow America’s response to COVID, which has been disastrous, the Federal Government should also be able to chart its own course in relations with China.

It does not mean Australia should kowtow or not defend its honour, but it needs to be smart, pragmatic and prepared to put aside ideology, just like our successful approach to coronavirus.

There are lessons from history. In 1972, then US President Richard Nixon went to Beijing to meet China’s leader, Mao Zedong. It was a meeting that helped bring China back in from the cold and it changed the course of the world.

America and China were bitter enemies. They had fought each other on opposite sides of the Korean War. But Nixon courted criticism by seizing the moment.

In his memoirs he said he was “embarking on a voyage of philosophical discovery”. It went against all the instincts and suspicion of the Cold War.

This was the height of Mao’s Cultural Revolution, yet for the duration of the Nixon visit, Chinese state media were told not to refer to the US as “imperialists”. There would be no protest and no insult.

Could we imagine such a rapprochement today?

Certainly China is much more powerful now than it was then and American prestige and influence has waned.

Xi Jinping is widely considered the most powerful Chinese leader since Mao and he has ruled with an iron fist.

He may not be for turning. This is what faces US president-elect Joe Biden: his Nixon moment in a new Cold War.

How does he talk to Xi Jinping, a man he has called a “thug”?

The America-China relationship was always going to be the defining issue of this century.

It is much bigger than coronavirus. Scott Morrison has successfully handled that crisis by going against all his political instincts. China is the crisis that will define him.

Stan Grant is the ABC’s International Affairs Analyst