'I would hope that the US side and the Chinese side could form a new context for their relationship as it stands now and set objectives . . . and that way I think we could be more in agreement than not,' Ms Franklin said.

'If not, we risk damaging our commercial relations,' she warned.

She said it was a wise decision by Beijing to expel Mr Wu quickly.

Solving the issue 'relatively quickly' had prevented it becoming 'a great symbol to some people in the US in a negative way about China', she said.

US trade with China is 'going along reasonably well' at the moment, she said, adding that business would help build trust.

Separately, Wu Yuan-li, a former professor of Stanford University who previously worked for the Ministry of Defence, said China should stop threatening Taiwan through military exercises or it could be counter-productive, writes Zhang Weiguo.

China ran the risk of creating misunderstanding and damaging relations with its neighbours by conducting these exercises and nuclear tests.

'Both history and reality have shown that wars can never solve any problems fundamentally. Since you don't have the capabilities to use war to solve the matter, then why do you intimidate people?' Mr Wu said.

He criticised Beijing for wrongly asserting that Washington has adopted a 'containment policy' against China.

Describing Sino-US relations as an 'interactive process', the veteran China expert said whether Washington would actually try to contain China will depend on how Beijing reacts to moves by the US.