Over time, China and the United States have developed important stakes in their relations. As demonstrated in the previous section, their economic welfare is increasingly dependent on the other’s economic performance and both hope the other’s economy maintains healthy growth. For instance, in the current global economic crisis, China hopes that the United States will be successful in getting itself out of recession soon and the United States hopes that China will try to boost its domestic demand so that healthy growth in the Chinese economy will contribute to an early end to the US economic recession. Both countries also share interests in promoting market reform, the rule of law, human rights protection and environmental preservation in each other’s country. Their interests even overlap on the Taiwan issue: both sides wish to maintain peace and stability in the Taiwan Strait and, for that purpose, oppose Taiwanese separatism.

At the regional level, China and the United States have acquired increasing stakes in promoting stability and prosperity in Asia. Both have important economic relations with the region. Both have deep concerns about the nuclearisation of the Korean Peninsula. Both have a vested interest in maintaining stability across the Taiwan Strait. Both see their interests more or less congruent with various existing regional security mechanisms and dialogues such as the six-party talks on the North Korean nuclear issue, the ARF, the Council for Security Cooperation in the Asia Pacific (CSCAP) and, more recently, the Shangri-La Dialogue. ^[2]

At the global level, China and the United States have shared interests in maintaining the international political and economic system. The bottom line is that both are important beneficiaries of current international arrangements. Both support multilateral institutions including the United Nations, the World Bank and the International Monetary Fund (IMF). Both wish to uphold international law ^[3] and both want to promote free trade. Both want to strengthen international efforts to fight terrorism, the proliferation of WMD, drug smuggling and illegal migration. Both desire international cooperation to meet other global challenges, ranging from environmental protection to dealing with infectious diseases such as severe acute respiratory syndrome (SARS) and avian influenza.

These and other shared interests have provided an expanding material basis for Sino–American cooperation.

China’s sustained and rapid economic growth during more than three decades has increased its weight in regional and world affairs. According to the World Bank, China became the fourth-largest economy in the world in 2005 (<http://finance.sina.com.cn/g/20060704/02402701910.shtml>). China surpassed Japan and became the third-largest trading partner in the world in 2003 (<http://news.xinhuanet.com/fortune/2005-04/16/content_2837060.htm>); and some economists believed that China would become the third-largest economy in 2007 (<http://business.sohu.com/20070717/n251099606.shtml>). China is not only a large economy and a big trading partner, it is the most dynamic of the large economies in the world. Its contribution to regional and global economic growth is increasingly being felt. According to a World Bank estimate, China has contributed an average of 13 per cent to global economic growth every year since its entry into the World Trade Organisation (WTO) in 2001 (<http://www.sjzmbc.gov.cn/public/show.jsp?id=20060907158578>). More recently, the World Bank predicted that China’s contribution to global economic growth would exceed that of the United States (<http:// business.sohu.com/20070913/n252117130.shtml>). Rapid economic growth has enabled China to improve its people’s living standards, modernise its backward defence facilities and enhance its diplomatic capacity. It has also made China more relevant in world affairs and the world more relevant to Chinese affairs.

Unlike some previous rising powers, China has deliberately chosen the path of peaceful development. It has sought to settle its border problems through negotiations and compromise rather than through coercion and war (<http://news.sina.com.cn/c/2005-01-06/17165448971.shtml>). It has tried to seek mutually beneficial economic relations with other countries through supporting a freer international trading system rather than through practising a beggar-thy-neighbour policy. It has increased participation in international cooperation on a whole range of issues, from the environment to non-proliferation of WMD. It has also made greater contributions to international efforts to maintain peace and stability. It is against such a background that the outside world, especially the United States, finds that it is in its interests to welcome and accommodate China’s rise so far. It is also against such a background that China–US interactions are becoming more balanced.

After more than three decades of practising its policy of openness and reform, China has changed in many ways. Among other things, it has replaced its centrally planned economy with a market one. It has attached increasing importance to the rule of law as one of the most important means by which to govern and advance social justice. It has publicly advocated the protection of human rights and has adopted many measures to improve its own human rights situation. Among other things, the National People’s Congress, China’s legislature, passed an amendment to the constitution in March 2004 stipulating that the State respected and protected human rights (<http://www.wutnews.net/ news/news.aspx?id=6634>). It has also tried to introduce democratic reforms such as nationwide village-level elections and measures to broaden participation in the selection of leaders at various levels of the Chinese Government and in the policymaking process. More recently, Chinese Premier, Wen Jiabao, said that China believed it wanted democracy and would make more efforts towards achieving this (<http://www.ce.cn/xwzx/gnsz/szyw/200703/16/ t20070316_10718768.shtml>). As a result of this, Chinese have already embraced such values as free trade, the rule of law, freedom and democracy. It is true that vast differences remain in practice; however, at the conceptual level, the value difference has been narrowing. Such changes have provided an expanding value basis for Sino–American cooperation.