Clarity and co-operation key to Sino-US ties

Xi Jinping, China's new Communist Party chief, made his first visit to the US in 1980. He was a 27-year-old junior officer accompanying Geng Biao, then a vice-premier and China's leading military official. Geng had been my host the previous January, when I was the first US defence secretary to visit China, acting as an interlocutor for president Jimmy Carter's administration.

Americans had little reason to notice Xi back then, but his superiors clearly saw his potential. In the ensuing 32 years, Xi's stature rose, along with China's economic and military strength. His cohort's ascent to the summit of power marks the retirement of the last generation of leaders designated by Deng Xiaoping.

Despite China's greater weight in world affairs, Xi faces internal strains that make China more fragile than is generally understood. China's export-led economic model has reached its limits, and the transition to domestic-led growth is intensifying internal frictions. Managing unrest through repression is more difficult than in the past, as rapid urbanisation, economic reform and social change roils a country of 1.3 billion people. Ethnic conflicts in outlying regions will also test Xi's political control.

China's foreign policy is another cause for concern - especially for the US. History teaches us that rising powers inevitably compete with status quo leading powers, and that this conflict often leads to war.

For now, the large bilateral trade imbalance has exacerbated US-China tensions, and can be safely reduced only by changes in behaviour on both sides. More immediately, China's territorial claims - particularly in the South China Sea, but also regarding its border with India - and its efforts to expand its influence over neighbouring countries, will force the US to navigate two overarching risks. The first is confrontation, which could occur directly or as a result of the US being drawn into conflicts between China and its neighbours.

The other risk is that Japan, South Korea, Vietnam, the Philippines, Thailand or Myanmar could fall into China's strategic orbit. Many of these countries will look to the US as a strategic counterweight should China seek to assert dominance. But some may conclude that it is safer to steer closer to China than away from it, because their economies depend so strongly on Chinese trade.