China and the US must get their strategic relationship right

The heretofore positive balance between hope and fear in US-China relations is tipping in the direction of fears outweighing hopes. Righting this balance should be the objective of the imminent US-China Strategic and Economic Dialogue in Washington. More particularly, it needs to be the focus during President Xi Jinping's state visit to Washington in September.

The dialogue and summit need to focus on the strategic level, not just regurgitate a laundry list of grievances and trumpet success with small-bore "deliverables".

Ironically, while the economic and cultural dimensions of the bilateral relationship are deepening, at the most fundamental level - mutual security - the character of the relationship is deteriorating.

In both countries, the vocabulary of the relationship is rapidly shifting from one centred on "engagement" to one of "deterrence", with each seeing the other as a fundamental security problem. The US sees a challenge to the rules-based system it has endeavoured to build since the second world war and is disturbed by domestic tightening on the mainland. For its part, Beijing sees an ongoing challenge to its domestic legitimacy ("foreign subversion") and to China's resumption of a rightful place among the great powers. Mounting abrasions over US alliance relationships, the South China Sea and cybercrime are just a few examples of the zones of disquiet.

For almost 40 years, most Americans had perceived China to be "moving in the right direction" in terms of its global role and domestic circumstance, even if slowly and erratically. Chinese, too, generally saw America moving in a net constructive direction, being a society in which economic interests would, in the end, triumph over its containment and regime change impulses. Because each side saw the other as tolerably "moving in the right direction", the context in which decisions were made was one of playing the long game, being patient, and minimising friction while enlarging cooperation.

Yet, today, despite recent limited progress in areas like climate change, economic negotiations and military-to-military exchange, each nation's views of the other have become more negative. Each nation's policy towards the other is hardening, and every negative move by one party justifies the next ratcheting up by the other. Complicating things further, China sees itself as stronger, and therefore less in need of being patient.

Given this direction of development, what needs to be done?