With Hua Guofeng and especially Deng Xiapoing’s rise to power, why wasn’t there a thaw and rapprochement in their ties, as the main divide was the rift in ideology between the USSR and Mao’s Stalinist ideas, which vanished under Hua and more so with Deng? Simultaneously, the CCP faced several internal and external issues in the 70’s/80’s, so stability with the USSR and the militarized border would have been favorable. Hence, what prevented this development from happening?
Economy, ideology and foreign policy
First a little background : when China emerged from civil war (and long years of Japanese occupation) in 1949, it was backward and undeveloped agricultural country. Chinese communist requested and got help from USSR, but this of course left China as second fiddle in communist world. Chinese leaders and especially Mao were not satisfied with such position. After Stalin's death and subsequent Khrushchev thaw, Mao "the great wrecker" pushed China towards increased hostility against Soviets witch culminated in Sino-Soviet split, and created economic chaos and devastation with Cultural Revolution. China was at one point isolated by both East and West. In a surprise move, in 1972, while Vietnam War was still going on, Mao met US President Nixon. Consequently, relations between US (and the West) improved. At that point in time Mao was not much interested in Western economic model and cooperation, his primary concern was foreign policy. Nevertheless, ties created at that time became important later.
After Mao's death in 1976 and subsequent fall of Gang Of Four, it became clear to Chinese leadership that Chinese economy and technological base was in ruins. Some of them, like Hua Guofeng preferred to simply return to Soviet economic model i.e. planned economy. However, this being late 70-ies , it was becoming clear that this type of economy could not readily compete with Western capitalistic market economy. Unlike 1950's , faith in socialism was gradually waning . Therefore, ideas of Deng Xiaoping were accepted, and his reforms steered China towards market economy. Now, Soviet Union was not against economic cooperation with the West. In fact, in those years USSR was looking to earn Western currency anyway it could, even by exporting cheap cars to UK. Problem was more of ideological nature, which may look as a trifle to modern public, but was huge deal in communist world. Xiaoping implicitly admitted that market economy and private ownership over means of production are more efficient then planned economy and state ownership of enterprises . This was against core communist and Marxist orthodoxy. He did not say that explicitly, but even as it was, it could strike down pillars of socialism in countries which were once relatively successful capitalist, like Czechoslovakia, Hungary, East Germany or Poland.
Second reason was foreign policy. First, China did not want to spoil its newly found good relations with the West, so kept out of usual West vs (communist) East conflict. Second, China had regional rivalry with India which even culminated in brief war. China was allied with Islamic Pakistan which in turn had bitter animosity toward India, but relatively good graces and help from the West. On the other hand, Soviets did their best to keep good relations with India, selling them huge quantities of weapons and setting up local production of aircraft, tanks etc.. Therefore at this side USSR and China were on opposite sides. So much so that China supported Pakistan and Afghan rebels during Soviet intervention in that country. Other flashpoint was Vietnam and neighboring Cambodia. Again, Soviets supported Vietnam with weapons and other assistance, preventing that country from becoming Chinese satellite, like Cambodia . When Vietnam invaded Cambodia to remove Khmer Rouge, China in turn briefly invaded Vietnam, and Soviets indirectly helped Vietnamese. Skirmishes directly on Sino-Soviet border were mostly avoided after death of Mao, but many questions remained unresolved. More importantly, Soviets had great influence in Mongolia which was not to Chinese liking. Final point of confrontation was North Korea. Although not pronounced like points above, this country was always dependent on Chinese and Soviet help and protection in order to survive. Therefore, some kind of battle for prestige was present in order to keep North Korean leadership closely tied to one or another country.
It must be noted that most of these causes were removed after the fall and breakup of Soviet Union. Russia was no longer communist and ideology was not at forefront. Both sides tried to avoid conflict with the West, but as Western pressure increased, they were forced to cooperate. Finnaly, when dealing with third countries they tried not to stand on each other toes and respect interests.
Keep in mind that Xi and the CCP have been extremely critical of the way Perestroika unfolded and brought down the USSR. This Chinese dislike of Soviet politics - admitting political issues with any Communist approach - refers all the way back to Khrushchev's denunciation of Stalin's terror in 1953. And it was probably reinforced after 1989 in Tiananmen, which after all happened just about the same time as the USSR collapsed.
Past that, for a while, until Xi, the Chinese seemed to become a less dogmatic Communist power, keen on acquiring Western knowledge and capital. While Russia was floundering, in search of a strong leader, not all that close ideologically to the CCP and with limited benefits to offer, except in military technology (which Russia might be concerned in exposing to Chinese copying).
Until such time as China became economically powerful in its own right, it had more to gain with Western alignment. While Russia didn't really really need a deep pocketed "friend" it did not entirely trust until oil prices started their long term decline around 2008.
They are also neighbors with a history of border problems in remote areas so there were limited motivations for rapprochement and great cause for caution.
Last, but not least, Nixon deserves credit for normalizing relations with China, making the USSR less attractive to them.
p.s. No, this answer does not mean to say Xi made those decisions in the late 70s. Only that Xi's warnings, as soon as he gained power, about Soviet mistakes in admitting guilt were most likely not an innovation by Xi, but rather a continuation of ongoing CCP distrust of Russia's handling of Communist ideology.
I agree - the Chinese saw as the "lesson" of Perestroika just how perilous it was to deploy pragmatism, and that it could and WOULD effect the collapse of an authoritarian or totalitarian government unless brakes could be applied ASAP - as they were eventually in China, most brazenly and brutally, at Tiananmen in 1989. In the ensuing decades, that government has managed to consolidated power, maintain restrictions, and tighten its control over the population with impunity.
Although a New Economic Policy was definitely seen as a "necessary evil" by the CCP's "Beijing Moderates,” in 1976, after 10 years of chaos, when the whims of Maoist fanatics ran the PRC into the ground, the post- Maoist Chinese leaders clearly and quickly saw from the example of their next door neighbor that although reforms may be essential to bolster economic development and military strength, they raise expectations, as well - a deadly disease for an oligarchy (or autocracy) interested primarily in self-preservation.