Joe Biden’s inauguration as US president offers a crucial opportunity for America — and other western allies — to reset policy on the defining geopolitical issue of today, and perhaps of the 21st century: how to deal with the rise of China as a great power.

The starting point should be a clear-eyed assessment of China’s behaviour. In the past year, China has crushed freedoms in Hong Kong, intensified its persecution in Xinjiang, skirmished with Indian troops on its border, placed sanctions on Australia and threatened Taiwan. It is hard to argue that Beijing represents anything less than an unambiguous challenge to western influence and democratic values.

Strategically, it displays an ambition to control the South China Sea and project military power across the Indo-Pacific. The increasingly sophisticated People’s Liberation Army is charged with being able to win global wars by 2049. Civilian technology companies are officially required to hand over any knowhow that the PLA demands.

Nonetheless, China is alluring. It contributes the largest share of global growth and remains the biggest trading nation. Its co-operation is also crucial to the future of the global commons, especially when climate change threatens the livelihood of all humanity.

Seeking to isolate China or sever its commercial links with the west is hence a non-starter. But so is “constructive engagement”, a policy that predates China’s accession into the World Trade Organization in 2001, but proved naive. It raised false hopes that exposure to commerce with the west would somehow inculcate liberalism into Chinese politics and society. More realism needs to be injected into the relationship.

Mr Biden should recognise that, for all its chaos, the administration of Donald Trump understood the utility of a hard edge towards Beijing. But he should also be clear that Mr Trump’s inability to bring western allies alongside was a fatal flaw. The EU’s investment treaty with China, agreed at the end of 2020 in spite of appeals by Mr Biden’s team to slow down, was in part a reflection of how much US influence has waned during the Trump years.

To be effective at countering China, the west needs priorities, and unity. Beijing has long been adept at sniffing out western inconsistency, for example in criticising the country’s human rights record without any plan to follow up with concrete penalties. China has also found it far too easy to undermine western attempts at a united front, typically by offering commercial lures to weakest-link countries.

The west therefore requires a mechanism to back its bark with real bite. Mr Biden should work with allies to create groupings that not only enable multilateral responses to Chinese misdemeanours but penalise their own members if they violate the unified front. Old engagement-era forums, such as the WTO, have become too sluggish and too fractious.

The strategy of the US and its European and Asian partners should reflect an uncomfortable reality. Trying to change China’s domestic nature by nudging it towards a more liberal path has failed. The focus should be on combating Beijing’s efforts to project its vision and power abroad through its influence campaigns and increasingly assertive military posture.

Mr Biden takes the helm with US dominance in decline and western democratic systems under attack. The west must find a way to trade profitably with China and co-operate in meeting common threats such as climate change, while restraining the spread of Beijing’s authoritarian creed. The future of the free world depends on it.