Just three days after the conclusion of the Third Plenary Session of the 18th Central Committee of the Communist Party of China on November 12, US Secretary of the Treasury Jacob Lew, paid a visit to Beijing as Obama's special envoy and met with China's top leader Xi Jinping. Three days after Lew finished his visit Chinese Vice-Premier Liu Yandong made an eight-day trip to the United States. Then, US Vice-President Joe Biden visited Beijing. This high-level interaction between the two countries sent a clear signal that both sides expect to deepen their engagement and advance bilateral cooperation.

Over the past four decades, the US has witnessed China's fundamental transformation, and by supporting China's full engagement in the world system it has greatly benefited from China's remarkable economic development. The bilateral trade volume was nearly $500 billion in 2012, and they have become each other's second-largest trading partner. As the largest foreign holder of US Treasury Bonds valued at about $1.3 trillion, China has also provided a huge amount of money for the US government, which has needed trillions of dollars to pay for its military operations in Iraq and Afghanistan, and to jump-start the paralyzed economy after the onset of the financial crisis. And in the area of security, the two countries share more common interests than divergences. From denuclearization of the Korean Peninsula to the stable supply of oil from the Middle East, and from anti-piracy in the Indian Ocean to free and safe navigation in the South China Sea, the United States and China share many of the same national security concerns.

China's new round of reform as laid out in plenum's roadmap document is mainly aimed at establishing a modern governance system and improving governing capabilities. As the largest developed country in the world, the US has rich experience of a market economy and social management that it can share with China. As China is committed to the rule of law, greater respect for human rights and improved compliance with the established standards of a market economy, the US interests in China will be better protected and greatly enhanced. China's new leadership has reiterated that Chinese investment overseas is targeted at $500 billion and its total imports at $1 trillion over the next five years. These promise great opportunities for US localities and companies.

Strategically speaking, US support for China's proposed reform drive is also the best approach to avoid a potential clash in the Asia-Pacific, which neither wants. The Obama administration has repeatedly said that the US hopes to see a stable, prosperous and strong China, and it welcomes the peaceful rise of China. If the US fails to openly back China's new reform program, China may see it as a broken promise and this could intensify the strategic trust deficit that has been growing for years between the two sides.

The US should also be aware of three trends that might result in a power shift in their relationship. First, the Chinese economy already accounts for more than half that of the US. If the US' growth rate remains around 3 percent over the next decade, while China maintains an annual growth rate of more than 7 percent, China's economic scale is likely to catch up with or at least be more equivalent to that of the US, and that would imply a more equal economic status between the two countries, which might lead to more competition rather than cooperation; second, as its contribution to the world economy continues and is likely to grow, China could remain the main engine of the global economy, as it has been since the global financial crisis erupted; third, China is expected to avoid the so-called middle income trap and become a high-income country in the next decade. The strategic implications and international effects of these trends are difficult to predict, but one thing seems certain, the US rhetoric will surely be toned down in the coming years.

At present, both China and the US are implementing tough but necessary reforms. The future of the new model of major power relations they have envisioned will depend largely on whether China and the US can push forward these difficult reforms.

Qian Liwei is an associate research fellow with the China Institutes of Contemporary International Relations

From www.chinausfocus .com

(China Daily 12/16/2013 page8)