President Barack Obama has previously said that the US needs to make a decision on labelling China a “currency manipulator”. Such a statement is not what has come to be expected by China and has been deemed entirely unacceptable. When officials from both sides meet in Beijing today for the latest round of the Strategic and Economic Dialogue, they will certainly have plenty to talk about.

US policymakers say they seek a positive relationship. They believe that disputes and collaboration can be compartmentalised. But, with the economic crisis, confrontation on some issues and co-operation on others cannot be kept apart. Nothing is trivial because negative statements, incidents and trends affect public opinion and policymaking in both nations.

Both sides had established a relatively sound base for co-operation in managing the world financial crisis, but then the US implemented tariffs on steel, tyres and other goods made in China, introduced anti-dumping, anti-subsidy and special protectionist tariffs, and launched six investigations into alleged unfair practices in export trade. A 53 per cent increase in the number of disputes involved $7.6bn of Chinese exports.