Where Sino-US relations are heading concerns not only the fundamental interests of the two peoples but also the stability of the world. The four decades since they established diplomatic relations has been both a honeymoon period and a rocky ride for China and the United States, as the dynamics of their relationship have been on an upward trend while constantly experiencing setbacks. Over the past 40 years, mutual respect and understanding for each other's core interests and strategic concerns have proved to be crucial for overcoming any disagreements or misunderstandings.

The US is beleaguered not by external threats or competition, but by a widening wealth gap and rising social conflicts. Its woes have been built up in the process of globalization, because its multinational companies have reaped most of the benefits, while people at the expense of those at the bottom of the ladder in both the developed and developing countries.

Globalization will not be reversed. Neither the current setbacks in globalization nor the opposition from unilateralism and trade protectionism will reverse the trend, no matter how the world keeps changing. The temporary wane in globalization will build new momentum in a new wave.

How the US perceives China is critical to Sino-US relations. The hawks in the Cabinet, Capital Hill and some US think tanks have gained the upper hand at present and there has been a U-turn in its policies toward China. This change has been based on some inaccurate perceptions. For instance, there is patchy awareness of China's history and the country's development, ignorance about China's resolute commitment to reform and opening-up, and skepticism of China's Belt and Road Initiative.

There are three options for Sino-US relations. First, the two build a brand new mechanism for competition and cooperation by reaching some consensus and negotiating some trade agreement. Second, both malicious competition and limited cooperation will persist, as neither will resolve or escalate the trade friction. Third, a new Cold War. In this worst-case scenario, there is no consensus, a further deterioration of relations, decoupling of the two economies and political and military confrontation.

The first option is obviously the best of the three.

No force can stop the Chinese economy from growing or halt the country's modernization. On the other hand, China will never seek hegemony. It will pursue a peaceful development path to promote a community with a shared future.

President Xi Jinping has affirmed that China will continue to hold high the banner of peace, development, cooperation and mutual benefit and uphold its fundamental foreign policy goals of preserving world peace and promoting common development. And that China remains resolute in its commitment to strengthening friendship and cooperation with other countries on the basis of the Five Principles of Peaceful Coexistence, and to forging a new form of international relations featuring mutual respect, fairness, justice, and win-win cooperation.

He has urged countries to respect the diversity of civilizations and to "replace estrangement with exchanges, clashes with mutual learning, and superiority with coexistence", proposing that all countries build a community with a shared future for humankind.

This is a far cry from a zero-sum game in which one side's gain is necessarily the other's loss. The US cannot prevent the rise of China. And there will be no winner in the trade war it has launched against China. It is a mutually destructive game, in which one side cannot hurt the other without harming itself.

To bury the hatchet, both sides should increase their strategic mutual trust and expand their common ground for cooperation. Both benefit from their bilateral economic and trade relations.

An established power trying to contain and isolating a rising power, as proved by history, is a recipe for disaster.

Sound trade and economic relations between China and the US are the cornerstone for the development of both, as well as the stability and prosperity of the world. Both have to tackle some structural issues to reach some win-win trade agreement. However, no deal should be signed in a rush, or under coercion. Any trade agreement should be signed in good faith, with realistic expectations and mutual consent.

We have to address two problems that have emerged in globalization. First, the unfair and unbalanced distribution of interests. Second, the growing need for global public goods and services. To address these two issues, China and the US, as the world's two largest economies, should work together to improve global governance. Both nations have a special responsibility to maintain global stability, improve the global trading system, safeguard the health of international financial institutions and provide global public goods and services.

The author is deputy director of the American and European Institute at the China Center for International Economic Exchanges.

This article was translated by Hou Sheng.

The author contributed this article to China Watch exclusively. The views expressed do not necessarily reflect those of China Watch.

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