Hank Paulson, the US treasury secretary, has called for a far-reaching reassessment of US-China policy, urging both nations to rise above short-term disputes and take a "generational" view of their relationship.
In a landmark speech before his first trip to China as treasury secretary, the China expert and former Goldman Sachs chairman said he would tell his counterparts in Beijing: "We want you to succeed."
Mr Paulson said: "The United States has a huge stake in a prosperous, stable China - a China able and willing to play its part as a global economic leader."
Declaring that the US and China shared huge areas of mutual economic interest, he highlighted energy and the environment as issues where the countries should work together.
"The biggest risk we face is not that China will overtake the US but that it will not move ahead with the reforms necessary to sustain its growth," he said.
The speech implicitly downgrades the importance of the Chinese exchange rate as a stand-alone issue, setting it instead as part of a necessary shift towards more market-based economic management.
However, Mr Paulson warned Beijing: "The level of anti-trade and anti-China sentiment in the US is also significant and growing."
He told the Chinese authorities that they underestimated "at China's own peril" the extent to which the currency issue was "viewed by their critics as a symbol of unfair competition".
He called on China to press ahead with liberalisation across a broad front, including: financial sector reform; fiscal and regulatory policies to reduce excess savings; currency liberalisation, and enhanced protection for intellectual property rights.
He praised China's record of economic reform and said it deserved to be recognised as a leader. This was why the US backed plans to give China and other emerging markets a much bigger say in the International Monetary Fund.
But Mr Paulson said "with leadership comes responsibility". He urged China to abide by the "spirit and letter" of the rules of the IMF and said the US looked to China to be its "co-operative partner" in reviving the Doha round of trade talks.
And he also suggested that these responsibilities went beyond economics to include human rights and nuclear non-proliferation.
The speech, which appeared to be aimed equally at Beijing and anti-China opinion in the US congress, positions Mr Paulson in the role of honest broker between the two.
He characterised the fundamental division as not one between the US and China but between liberalisers in both countries and their protectionist opponents.
He warned: "If China does not move quickly to continue reforming its economy, it will face a backlash from other international economic stakeholders. This backlash would not benefit any of us." - (Financial Times service)
