Chinese Foreign Minister Wang Yi (R) meets with US Secretary of State Rex Tillerson in Beijing, March 18, 2017.[Photo/Xinhua]

President Xi Jinping met with visiting US Secretary of State Rex Tillerson on Sunday, saying that cooperation is the only correct choice for both countries. Tillerson said President Trump valued communication with President Xi, and looked forward to meeting Xi and the opportunity for a visit to China. The US side is ready to develop relations with China based on the principle of no conflict, no confrontation, mutual respect and win-win cooperation, said Tillerson. Their remarks signal the two countries share a desire to keep their relationship on an even keel whatever the circumstances.

Another positive development was the phone conversation between Xi and Trump on Feb 20, when Trump emphasized his administration will continue to adhere to the one-China policy.

As Xi said in his speech at the World Economic Forum in Davos in January, this is the best of times and the worst of times, which also applies to China-US relations as they face great opportunities and serious challenges simultaneously.

Admittedly, Trump's China policy is still evolving, but some basic elements have already emerged. First, there is basic appreciation that the US and China need cooperation, not confrontation, with many of their interests converging, especially in maintaining regional and global peace, and promoting global economic growth.

Second, economic cooperation and trade frictions are likely to increase as the Trump administration focuses its attention on deriving greater economic benefits from bilateral trade and investment. Trump's ambitious plan to improve the US' infrastructure needs a great deal of capital and other inputs, creating lots of opportunities for economic cooperation between China and the US, not least because of China's rich experience in infrastructure construction.

Third, the US' changing attitude on global governance has created uncertainties over how to meet global challenges, because Washington still plays the biggest role in managing global affairs. But some adjustments will have to be made in global governance to accommodate the changing tides of globalization, especially the rising populism, widening gap between rich and poor, and the changed positions of the Trump administration on climate change and existing and emerging regional and trans-regional free trade agreements and arrangements.

In this connection, the Belt and Road Initiative (the Silk Road Economic Belt and 21st Century Maritime Silk Road) as an innovative idea of common development offers great opportunities as well as challenges to the US.

Fourth, while the initial ideological confrontation between China and the US may have subsided for now, they could resurface. The fact is the geopolitical situation in Asia is pretty shaky as the Trump administration continues the "rebalance to Asia" strategy by consolidating its military presence in the Asia-Pacific. Regional security issues will be further compounded with the deployment of the US' Terminal High Altitude Air Defense anti-missile system in the Republic of Korea.

What strategic consensus China and the US can reach on such core issues, to a large extent, will determine whether they can avoid falling into the Thucydides trap. Increasing trade and investment between China and the US, and their resultant economic interdependence, have been the bedrock of bilateral relations for decades. This interdependence requires Trump to look at his "America First" policy from the right perspective, because the policy can progress only with deeper cooperation between China and the US.

Before Trump decides on ways and means to reduce the US' trade deficit with China, he has to realize where China's "trade surplus" actually goes. US companies in China make huge profits from the current trade balance, including those supplying components for the final products made in China.

Perhaps the US can reduce its trade deficit by increasing its exports to China, by, among other things, supplying surplus shale gas and oil and lifting the ban on some of the dual-use goods. Some adjustments apart, the overall direction of economic cooperation and free trade and investment between the two sides must be kept intact.

The US and China bear special responsibilities, as articulated in the United Nations Charter, to maintain world peace and security. And in today's new era of globalization, those responsibilities also include meeting economic and social challenges, for which a cooperative relationship is both necessary and indispensable.

The author is a senior advisor to Pangoal Institution, and former vice-minister of the Ministry of Foreign Affairs. The article is an excerpt from his speech at a recent seminar hosted by Pangoal Institution.