A test for US-China ties

This year has seen tensions rise in US-China relations. Trade frictions, consternation over territorial issues, and China's suspicions about the target of the US "pivot" to Asia have soured the atmosphere.

But the past year has been one destined to see tensions escalate in Asia in that not only China and the United States but also Russia, the Democratic People's Republic of Korea, and the Republic of Korea will see or have already seen leadership changes. And Japan is very likely to have its national election within a few months. So leaders everywhere in the region have been distracted by domestic leadership politics and have thus been determined not to appear weak abroad. Diplomatic flexibility and nuance rarely triumph in such circumstances.

The year 2013 will witness a very different set of incentives because the US and Chinese leaders will know that they are going to be dealing with each other for at least four years to come. It, therefore, is time to sit back and ask what fundamental approaches the US and China should take. In doing so, both Washington and Beijing should keep in mind that no other country in the region wants to have to choose between siding with one or the other. All Asian countries want to participate in and benefit from China's growth, just as all want a large US presence for the stability and opportunities that affords them.

It is worth remembering that, despite tensions, US-China ties bear no relation to the Cold War era. The American and Chinese economies are truly interdependent - neither can take major actions against the other without doing serious damage to itself in the process. They share major concerns beyond Asia, too.

In the Middle East, for example, the US' direct dependence on energy from the region is rapidly dropping to zero, while China's dependence is large and rising. But the US retains major diplomatic and security interests in the region, while China's military capabilities there will remain very modest for years to come. Sino-American cooperation across economic, diplomatic and security issues can, therefore, offer much to both sides, while working at cross-purposes over Middle East policy can hurt both.

As they enter 2013, the top officials in the new US and Chinese administrations would be wise to lift their gazes beyond all the immediate issues demanding their attention and devote serious effort to addressing two fundamental issues that will shape US-China relations over the coming decades.

First, both countries are at a similar point in their national trajectories. Neither the US nor China can simply continue managing things domestically as they have done in recent years.