Before arriving on his state visit to the US on Tuesday, Chinese president Hu Jintao called for an end to the two countries’ “zero-sum cold war mentality”. Mr Hu is right that China’s rise can be, and ought to be, of benefit to all countries. It could also be badly mismanaged. Ensuring that it is not – impossible without a constructive US-China relationship – is today’s great challenge for international diplomacy.

The economic side of the relationship has been marred by friction. The US complains about China’s huge overall and bilateral trade surpluses, exchange rate peg, vast foreign currency reserves and violations of intellectual property rights. China complains about incompetent US financial regulation, vast fiscal deficits and the Federal Reserve’s quantitative easing. Yet the meeting may not be as inauspicious as it seems.

With China increasingly worried about inflation, the case for sustained nominal appreciation looks more attractive to Beijing. Domestic pressure for low inflation is even more potent than that for exports. This may explain why the renminbi has appreciated by more than 3.5 per cent against the dollar in recent months. Adding in wage rises, a substantial real appreciation may be under way.