Two kinds of rebalancing

During the George W. Bush era, the White House began to pay greater attention to the Sino-U.S. relations, which were managed vis-à-vis the Strategic Economic Dialogue. But neither Bush nor his Vice President Dick Cheney had a central role in the Dialogue that was operationally led by Treasury Secretary Henry Paulson.

In the Obama era, the bilateral talks have been expanded and deepened into the Strategic & Economic Dialogue (S&ED), which now seeks to address the core economic and security issues between the two nations.

Typically, the economic matters include global rebalancing, China's 12th Five-year Plan and U.S. economic policies; cyber security issues; bilateral trade deficit; U.S. and Chinese compliance with World Trade Organization commitments, and so on. In turn, the security issues extend from U.S.-China military-to-military relationship to China's military modernization and Pentagon's rearmament in Asia Pacific, and maritime territorial disputes.

Other issues comprise cross-Strait relations and U.S. arms sales to Taiwan, climate change and energy cooperation, as well as democracy promotion and human rights issues.

In the past few years, critics in the West have argued that China is showing increasing assertiveness in Asia. An alternative view is that, as China's economy has grown, it simply plays more important role regionally. In the postwar era, America brought in capital and created jobs in Asia. Now it's China's turn.

Both Washington and Beijing are pivoting toward Asia, but each is rebalancing in a very different way. The U.S. rebalancing is driven by the military. Since summer 2012, the objective has been to double the number of U.S. combat ships in Asia to 60 percent of the total by 2020.

In contrast, the primary goal of Chinese rebalancing involves trade and economic development, a "maritime Silk Road" in Asia.

Changing status quo

Understandably, Vice President Biden argued that China's ADIZ was altering the status quo in the region. However, as China and emerging Asia will play an increasingly vital role in the world economy in the coming decades, today's status quo will shift dramatically.

The same goes for the United States. In the aftermath of World War II, when America accounted for half of the world economy, support for U.S. global engagement peaked in America. In contrast, today growing numbers of Americans believe that U.S. global power and prestige are in decline, as evidenced by a recent Pew Research survey.

The reticence is not an expression of across-the-board isolationism. Most Americans continue to say the benefits from U.S. participation in the global economy outweigh the risks. Consequently, support for closer trade and business ties with other nations stands today at its highest point in more than a decade. That fact is of great relevance in the Sino-U.S. relations today.

By the same token, more than half of Americans disapprove of President Obama's handling of China, according to Pew Research. Every second American views China as the world's preeminent economic power. While many Americans contend China can be a serious problem, they also believe China is not an adversary.

In the past few months, President Xi has often spoken about the need for a "new model for major country relations." It is the right idea in the right time.

Vice President Biden's visit exemplified tentative steps to this new direction. But it is – as they say – a work-in-progress.

Dr Dan Steinbock is the research director of international business at the India, China and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and EU Center (Singapore). For more, see www.differencegroup.net