For three decades (A) the Americans had occupy (B) the favoured position in terms of its relations with Russia and China and the disintegration (C) of the Soviet Union essentially negated (D) the Russian threat in Chinese eyes.
Here, ‘occupied’ is correct. For three decades the Americans had occupied the favoured position in terms of its relations with Russia and China and the disintegration of the Soviet Union essentially negated the Russian threat in Chinese eyes.