US President elect Mr Barack Obama has vowed to put more pressure on China over export incentives and managed currency and upbraided Beijing over human rights abuses and failure to enforce labor, environment and product safety standards.
Analysts said that a more aggressive US stance, particularly on trade, risks testing delicate relations amid rapidly rising unemployment and a gloomy economic outlook in both countries. China's leadership may be facing one of its biggest challenges since the Communists won the civil war in 1949. Struggling with unemployment amid the global economic crisis, short cuts to help Chinese products compete abroad, like subsidies and tax reductions, look increasingly attractive.
Mr Clark Randt US Ambassador to China said that in the United States, protectionist calls are mounting as house prices tumble and pension savings collapse, but officially Washington trusts that mutual self interest will keep either side from lashing out. He added that "The Chinese have understood clearly that they are our biggest creditor. They are rooting for us, they hold a lot of dollars and they understand that we are in the same boat. If our economy is in trouble, they are in trouble."