BEIJING - FORGED in absolute secrecy at the height of the Cold War, the diplomatic ties established between the United States and China 30 years ago this Thursday had a clear goal: to counter the Soviet threat.

Over those three decades the strategic marriage of convenience has transformed into a full-fledged relationship. The two countries are entwined economically and politically to an extent unimaginable when ties were normalised on Jan 1, 1979.

'One can hardly find any issue on which we do not cooperate,' China state councilor Dai Bingguo said in a speech published in Tuesday's China Daily newspaper in honour of the anniversary. But China's other state-run media, given to splashes of propaganda for special occasions, have been rather quiet for this one.

Ending decades of political estrangement, the formal ties helped lay the framework for US-China relations to evolve beyond the Cold War to cooperation on global issues from climate change to nuclear proliferation and the challenge of reshaping the world financial system.

'The scale of the relationship is beyond what you could have expected,' said Winston Lord, a former US ambassador to China and one-time aide to Secretary of State Henry Kissinger.

'It was very hard to envisage in the '70s just how successful China would become economically and what a great power it would become today.'

At the time, America saw the Soviet Union as its biggest threat and sought to ally itself with communist China as a balance to Soviet power, even at the expense of cutting its ties with Taiwan, which it had long supported. China considers Taiwan to be a breakaway province.

'The negotiations took place in total secrecy because if they had leaked, the politics in the US would have made it impossible to continue,' said Stapleton Roy, director of the Kissinger Institute on China and the United States at the Woodrow Wilson International Centre in Washington.

Still, the US had signalled its intention to switch recognition from Taipei to Beijing years earlier, Mr Roy noted. 'Anyone who understood the significance of (President Richard) Nixon's visit to China (in 1972) realised that the writing was on the wall.'

The thaw had actually begun in 1971 after a long-isolated China invited a US table tennis team to visit - the first step in what became known as ping-pong diplomacy. The same year, Mr Kissinger was dispatched to Beijing on a secret mission to start talks.

A year later, Nixon became the first American president to visit communist China and its leader, Mao Zedong, setting the stage for the eventual normalisation of ties.

'It was a very courageous and farsighted move by the leaders of both sides,' said Mr Lord, who was a top aide to Mr Kissinger during his mission to China.

Nixon's credentials as a conservative anti-communist gave him political cover, but his downfall with Watergate delayed the process.

The establishment of diplomatic relations finally came at the beginning of 1979, after months of secret negotiations by the administration of President Jimmy Carter, who was determined to finalise the normalisation begun by Nixon.

At the time, the United States recognised Taiwan as China's legitimate government and had a security treaty that stationed troops on the island. Hoping to avoid huge opposition, Mr Carter chose to make the announcement in mid-December after Congress had recessed for the holidays.

The abrupt break was a major blow to Taiwan's leaders though Congress later passed the Taiwan Relations Act, which allowed quasi-diplomatic ties and the continuation of arms sales to the self-governing island.

Taiwanese diplomat C.J. Chen, who was serving in Washington at the time, said Taiwan intelligence had known for months the Carter administration was engaged in secret talks with China. Still, the official US notification sent to Taipei seven hours before the announcement came as an unpleasant surprise.

Mr Carter 'might think it was the best way to avoid any objection, but it was not the way to treat an important ally,' Mr Chen said.

On the heels of the new diplomatic ties, Deng Xiaoping, China's leader by then, flew to Washington in late January and was greeted on the White House lawn by Mr Carter. Mr Deng charmed the US public during his visit, impishly donning a 10-gallon hat at a Texas rodeo and waving to the crowd.

The normalisation of relations coincided with China's decision to embark on free-market reforms. The Communist Party had decided in December 1978 to endorse small-scale private farming, the first step toward dumping Mao's vision of communal agriculture and industry.

'Deng also got inspiration from the US. He believed we could still learn from a capitalist country. We can say the development of Sino-US relations promoted China's opening and reform so that they marched together,' said retired Chinese diplomat Zhou Yihuang, who was a junior officer in the Foreign Ministry at the time.

China's embrace of economic reforms helped power its rise from an isolated Asian backwater to a global economic and political power and broadened its relationship with America.

The two countries have gone through ups and downs.

The most serious strain, say US observers, came with China's 1989 crackdown on student-led demonstrations in Tiananmen Square.

Hundreds are believed to have been killed, and a horrified US backed away from - but did not entirely break ties with - China.

Other issues, including Taiwan, Tibet and human rights, have remained stumbling blocks.

From China's perspective, the most troublesome matters have been the bombing of the Chinese Embassy during Nato's war on Serbia, the crash of a Chinese fighter after a collision with a US spy plane, and, most critically, US arms sales to Taiwan.

But both sides agree that even with the difficulties and setbacks, the overall trend has been positive over the 30 years.

The countries have now developed a more 'complex and mature' relationship - one that can withstand the inevitable frictions that will arise, said Zhu Feng, director of the Centre for International and Strategic Studies at Peking University.

But it is the level of economic interdependence that has become most striking. China now owns more than US$500 billion (S$718 billion) in US government bonds, more than any other nation. During the presidency of George W. Bush, as Chinese exports to America boomed, China's trade surplus hit US$163.3 billion in 2007.

The biggest challenge going forward will not be political so much as economic, experts say. With the countries' economies so deeply linked, the continuing global financial crisis will take top priority for Barack Obama when he assumes the presidency Jan. 20.

'Both of us are feeling the pain of the economic slowdown. The question is whether we're going to be able to find a way to work cooperatively or whether we fail and move toward blaming each other,' Mr Roy said.

'If anything has been shown, it's that our economies are so closely linked now, neither can punish the other economically without inflicting pain on itself.' -- AP