SPY EYES

The political calendars of the United States and China follow different cycles, but once every two decades China’s leadership transition occurs simultaneously with the U.S. presidential election. So now, with President Obama’s re-election and Xi Jinping’s anointing as chief of the Chinese Communist Party, both countries have an opportunity to take stock of the bilateral relationship.

These two leaders may not want to say it out loud, but they would privately admit that U.S.-China relations are in trouble. While the value of the Chinese currency and trade disputes dominate headlines, the real cause of deteriorating ties is more profound and potentially dangerous. Mutual strategic distrust has escalated in the last two years and is creating a vicious cycle that, if not stopped quickly, could lead to a fierce rivalry harmful to both countries.

Washington and Beijing blame each other for the growing tensions. The Obama administration believes that China’s assertiveness on territorial disputes and its military modernization must be met with countermeasures. Chinese leaders have grown increasingly antagonistic to U.S. diplomatic support for Vietnam, the Philippines and Japan in their territorial disputes with China. Most important, Beijing resents the so-called Asia pivot, Washington’s plan to beef up U.S. naval assets in the Western Pacific.

Thus the top foreign-policy priority for both leaders is to reset the tenor of Sino-American relations. Of course, given the near-collapse in Sino-Japanese relations, Xi will have to devote considerable energy to defusing tensions with Tokyo. But he must be aware of two interlocking realities: that U.S.-China relations are far more critical to China’s long-term interests, and that repairing ties with Tokyo will be only the first, but vital, step in that direction.

There is little doubt that top Chinese leaders are acutely aware of the intrinsic importance of a stable relationship with the United States; such awareness has prevented crises in the past three decades from totally destroying relations. It is also highly likely that China’s new leaders will continue to pursue a pragmatic foreign policy and try to avoid confrontations with the United States.

However, maintaining a fragile status quo is becoming increasingly difficult. Several trends — changes in relative power in China’s favor, the one-sided focus on the military aspect of America’s Asia pivot, escalating territorial disputes that could drag in the United States and China’s military modernization — are exacerbating mutual distrust. Xi and his colleagues need to initiate a policy reset to signal to the second Obama administration that Beijing seeks to put ties on a more solid footing.

A reset could start with concrete measures to resolve territorial disputes with China’s neighbors, particularly Japan, Vietnam and the Philippines. Should Xi succeed, he would be able to demonstrate that China will abide by international law in resolving such issues. Success would remove the most dangerous underlying dynamic in the Sino-American strategic competition in East Asia.

A reset also needs to stabilize the deteriorating security relationship with the United States. This will be difficult because of the strategic distrust caused by the fundamental differences in the political systems of the two countries. Yet, China can still take substantive measures to reverse the adversarial dynamics. Making Sino-American military-to-military exchanges more meaningful and substantive is one. Agreeing on rules to avoid naval accidents is another. Initiating a bilateral dialogue on cybersecurity is absolutely critical in avoiding potentially calamitous incidents.

Granted, Beijing will continue to encounter skepticism from Washington. But if Xi takes the initiative, with concrete proposals, he should find the Obama administration receptive.

To shift American perceptions of his leadership, the third component of Xi’s reset is domestic reform, especially political reform. The conservative backsliding in China over the past decade is the deeper cause of the worsening U.S.-China relationship. Xi can reverse this dynamic, beginning with a more symbolic step, such as releasing Liu Xiaobo, the jailed Nobel Peace Prize laureate, under medical parole.