As Beijing and Washington begin a testing week in their relationship, both would do well to look beyond their immediate difficulties and focus on their long-term interests. The short-term problems appear daunting. US President George W. Bush is due this week to decide on Taiwan's shopping list for arms. Even though most analysts believe he will not sell the Aegis radar-equipped destroyers Taipei has asked for, he is likely to agree to provide some weaponry. Beijing has indicated its response and said that any arms sales to Taiwan would have a 'devastating impact' on Sino-US relations. The arms sales will come on the back of a chain of events that have clouded relations between Washington and Beijing - the spy plane incident, the arrest of US citizens in China and the decision by Washington to grant a visa to former Taiwanese president Lee Teng-hui. It is important to view these irritants against the perspective of what China and the United States want from each other. Though neither side has really spelled out in detail how they would like their relationship to evolve, the broad picture is clear. China needs a co-operative relationship with the United States and a stable external environment if its economic reforms are to continue at their present pace. Deteriorating relations with the United States will impact on trade and investment, as well as delay China's entry into the World Trade Organisation. For the United States, preserving stability in northeast Asia and maintaining access to China for its businesses are two crucial policy goals. Neither of these can be achieved if relations with Beijing continue their downward spiral. A stable, co-operative relationship is in the long-term interests of both countries. The real challenge to the leaders is to evaluate the cost of these short-term problems against their wider interests. They need to identify the kind of compromises that must be made in order to achieve their shared long-term goals. So both Washington and Beijing are clearly keen on resolving the current crisis in their relationship. The danger is that leaders in both capitals will come under pressure from hardline voices. There is anger in China over the death of fighter pilot Wang Wei, while many in Washington are still smarting over the humiliation of having a US military plane and its crew detained. In the weeks ahead, both countries would do well to begin a high-level strategic dialogue on the broad direction they would like to take their relationship. This could help to put the current crisis in perspective.