This paper critically examines the failure of the US engagement policy towards China, which aimed to turn China into a liberal democracy through the promotion of liberalism. The failure is attributed to two key factors: firstly, the Chinese Communist Party's (CCP) “core” leaders perceived liberalism as an existential threat, which inhibited any potential for peaceful evolution. Secondly, the US attempts to plot color revolutions, and interventions in Taiwan issues threaten China's national sovereignty and territorial integrity, which triggered nationalist backlashes. A detailed rhetorical analysis of speeches from CCP's "core" leaders and case studies of US-funded NGOs in Tibet and Xinjiang, as well as the US strategic ambiguity policy toward Taiwan, provide a deeper understanding of these causes. The study underscores the necessity for a thorough reevaluation of the assumptions underlying US engagement policy with China. It calls for greater understanding, respect for sovereignty, and acknowledgment of the CCP's deep-seated ideological stance for more constructive future interactions between the US and China.