Few issues between the United States and China are as fraught as their co-dependent financial arrangements.
Holding more than $1 trillion in U.S. debt, China is America's biggest banker. But China is worried about America's ability to meet its obligations, and all of Asia is concerned about the shaky U.S. dollar.
“There are a lot of concerns here that persist in terms of the Chinese taking away our jobs and owning all of our Treasury bonds,” said Bonnie Glaser, Freeman chairwoman in Chinese studies at the Center for Strategic and International Studies.
With a certain amount of paranoia on both sides, President Obama sits down with Chinese counterpart Hu Jintao next week for a bilateral meeting and dinner in Beijing that are not expected to produce much in terms of substantive progress.
But with the two countries' economic fates increasingly intertwined, maintaining an open and direct dialog is essential, said Jeffrey Bader, senior director for Asian Affairs on the National Security Council.
“We know that building a durable and stable relationship with China, the most dramatically rising power of this century, will be neither straightforward nor simple and will require both toughness and adaptability on our part,” Bader said. “Trust and confidence will need to be built by word and action; they cannot be assumed.”