The US ‘rebalance to Asia’ policy announced in 2012 reflects a steady deterioration in US–China relations and the growing reality of a ‘security dilemma’ dynamic between Washington and Beijing. To understand the current trajectory and evolution of US–China relations, it is helpful to view the overall relationship in terms of three key phases: (1) hostility phase (1949–69); (2) rapprochement and convergent interests phase (1970–89); and (3) bifurcation phase (1990–present), featuring warm and robust social and economic relations juxtaposed with cold and hostile security relations. The third phase is most dangerous because the achievements that are perceived in the two countries’ cooperative social and economic relations obscure the insidious deterioration of the two countries’ security relationship. Thus, the military and security realm remains the weakest link in the overall Beijing–Washington comprehensive relationship and, moreover, could be the source of major conflict in the years or decades ahead. In order to avoid any major bilateral rupture, the United States and China must find ways to build strategic trust and to focus on long-term security challenges in which both countries share common interests.