By Fu Mengzi

Sino-US relations plummeted to freezing point in early 2001 in the wake of a US spy plane colliding with a Chinese fighter jet.

China was at the time regarded as a "strategic rival" by some Americans. Then came the September 11 terrorist attacks. The bilateral ties warmed up significantly because both sides had common needs to fight against terrorism and also because the United States woke up to the real threat to its security.

Some China experts in the United States believed that the September 11 terror assaults marked the beginning of Sino-American ties taking a turn for the better.

Others thought the turning point began with the United States granting China permanent normal trade relations status.

Former US Secretary of State Madeleine Albright, however, once remarked that economic relations had long been the bedrock for fluctuating China-US ties.

Looking back, one finds that the bilateral economic ties have not necessarily danced to the tempo of the Chinese-US political relations, which swing like a pendulum between good and bad.

In the mid-1980s, for example, China, which was beginning to open up to the outside world, did not command enough attention from US corporate giants, though general China-US relations were very good.

After the Cold War ended in the early 1990s, China's importance in the US global strategy declined. As a result, China-US relations slid into a period in which the bilateral ties were ill defined, compounded by other factors.

The general bilateral ties were haunted by a host of unpleasant events former Taiwan leader Lee Teng-hui's US tour, crisis across the Taiwan Straits, annual debate on extending to China the most favored nation status, the bombing of the Chinese embassy in Belgrade and so on. All this rendered both sides' efforts to bring about a strategic partnership a short-lived flash of hope.

In the meantime, however, Sino-US economic relations were making impressive advances, free from the interference of the swinging political relationship.

In the whole of the 1990s, for instance, the trade volume between the two sides expanded fivefold.

With Shanghai's Pudong Area opening up, American corporate giants, chafing at the lack of opportunities, rushed into China and brought with them millions of dollars in investment.

It is this irresistible force in the quest for profits that has become a vitally important factor cementing China-US relations. Now that the Chinese economy is moving ahead on a fast track, both sides are becoming increasingly dependent on each other economically.

In the past, US lawmakers, during debates in Congress, generally believed that China needed the United States more than the United States needed China.

But things have changed. In 2005, for instance, the Chinese-US trade volume hit US$212 billion. China has now become the United States' second largest trading partner after Canada, which means that China, as a newly emerging big market, helps largely to maintain US economic supremacy.

Although China enjoys a favorable balance in its trade with the United States, a significant portion of it flows back to the US market, buying US$200 billion worth of US treasury bonds. In this sense, China also helps balance the United States' deficit in an astronomical way.

A conclusion can, therefore, be drawn that the United States very much needs China economically.

Closer trade relations mean more friction. As a matter of fact, trade friction has been arising time and again from bilateral trade. But at the same time, coordinating efforts are frequently made. And, as a result, trade and economic issues have been saved from plunging into the abyss of politicization.

Furthermore, the coordinating efforts in the course of handling the disputes go beyond bilateral relations. For example, the United States invited China's central bank governor and finance minister to participate in the G8 finance ministers' conference earlier this year because China is indispensable to coordinating the world economy and financial markets.

True, the Chinese economy is much smaller than the US economy in size. It is also smaller than the economies of Japan and the members of the European Union. But it has a very big role to play in the world economic arena.

The United States has long complained about the G8's incompetence and inability and the appeal to bring about a "Group of Four," referring to the United States, China, Japan and Europe, is heard from time to time. Some even go so far as to suggest: "Why not a G2?" Indeed, the Chinese and US economies, as the twin engines powering the world economy, are supposed to shoulder more responsibilities for setting the "roadmap" and "traffic rules" for the development of the global economy and trade.

Although political interests override everything else in some cases, trade and economic interests are, however, an integral part of these political interests.

To put it frankly, if Taiwan declared independence, and in the worst-case scenario the Chinese mainland used force to stop the independence attempt, even if the United States got involved in the conflict it would be dictated by its own interests, not by Taiwan's. In his book "The Grand Chessboard," Zbigniew Brzezinski, national security adviser to the Carter administration, says that the United States' sympathy may be with Taiwan but is not for Taiwan.

From a purely economic perspective, the cost of the armed conflict between the two sides would go far beyond what the United States is willing to bear. Many researchers have painted the picture: The global stock and bond market would collapse, once the spectre of the US-Chinese armed conflict was raised over Wall Street, once the global monetary market sensed that China would dump US treasury bonds, once the leaders of the transnational corporate giants pictured in their minds the breaking down of the global supply chains caused by US economic sanctions against China. The leaders of the world countries and the corporate giants would push Washington hard to take resolute action to defuse the crisis.

Astute US politicians have sensed this kind of strategic risk and realized that Sino-US relations should be viewed in a much broader and long-term perspective. Economic factors are bound to find expression in political decision-making, which means a strong inherent driving force for the United States to keep Taiwanese independence in check. This is not exclusively for the interests of the Chinese mainland, but for the common good of both sides.

The author is a researcher with the China Institute of Contemporary International Relations.

(China Daily December 29, 2006)