And when that moment comes, Washington and Beijing will not be reinventing the wheel of a peaceful and productive modus vivendi.

The two countries’ presidents talked -- and apparently agreed – about all those key issues during their meeting in Bali, Indonesia, on November 14, 2022. The same bilateral problems were reviewed, and updated, during their subsequent meetings in Woodside, California, on November 15, 2023.

Both meetings reaffirmed the communication at all levels of government to implement agreements and manage differences in a constructive manner.

It is quite probable that the two heads of state will continue those discussions on the sidelines of the next G20 meeting in Rio de Janeiro, Brazil, on November 18-19, 2024.

During the Bali meeting, the U.S. President Joe Biden told China’s President Xi Jinping that U.S. had no intention to (a) "have a conflict with China,” (b) "seek de-coupling from China,” (c) “halt China's economic development” or (d) “contain China.”

U.S. and China know each other well

All that is a fundamental recognition of a clearheaded statecraft: There is no other way to manage relations among nuclear armed “competitors.”

Biden was equally clear regarding China’s red lines about its system of government and the status of Taiwan. On those issues, Biden reassured Xi that “the United States respects China's system and does not seek to change it,” and that “the United States does not support Taiwan’s independence.” Biden also added that “the United States does not support two Chinas or one China, one Taiwan,” concluding that “the United States does not seek to use the Taiwan question as a tool to contain China.”

Summits in Bali and Woodside addressed some of the principles of American policies toward China, but three key issues were left unresolved.

First, the U.S. considers that China’s maritime border claims are unlawful because they violate the United Nations Convention on the Law of the Sea (UNCLOS). That, in the U.S. view, affects the freedom of navigation along some of the busiest sea and air lanes in the world.

Second, Washington does not support Taiwan’s independence but does not want its current status changed by force.

Third, the U.S. wants North Korea’s complete nuclear disarmament.

China rejects the U.S. view on its maritime borders as an attack on its sovereignty and territorial integrity. Beijing, however, stands ready to find mutually acceptable solutions with its Asian neighbors, and it also works on the Code of Conduct in the South China Sea.

An equally complete and vehement disagreement refers to the status of Taiwan. China considers Taiwan its own province and an internal matter.

For China, North Korea’s nuclear disarmament would be subject to that country’s agreement to accept such negotiations, with security guarantees and economic compensations.

U.S. should focus on economy and compete

Apart from those flammable security issues, bilateral trade and investment problems are also at the core of the U.S.-China “strategic competition.”

But that is an area where tensions will continue to ease as both countries find suitable substitutes for their bilateral trade and financial transactions.

China’s economy has strong economic fundamentals, advanced infrastructure and a rapidly expanding science and technology.

At the moment, China’s economy is moving along its 5% growth path, with virtually no inflation, a relatively low public debt (56.3% of GDP), large trade surpluses (3.5% of GDP), a net international investment position (17.2% of GDP) and huge, and growing, domestic markets.

China’s current pace of economic activity is well within the physical limits of its potential and noninflationary growth, which means that – if needed – a strong support to domestic demand can be safely administered through easier credit policies.

That’s what Beijing is doing now, although most of that stimulus seems directed at a gradual resorption of excess supplies in real estate – with positive knock-on effects on consumer durable goods (household appliances, furniture, automobiles, etc.), broadening social welfare, smart city technologies and expanding service trades.

In a world of MAD (Mutual Assured Destruction), nuclear armed superpowers should coexist peacefully even if sometimes they have to hold their noses. The U.S., therefore, should use its unmatched human and capital resources to compete by rebuilding its science and education.

And Washington should not count too much on friends and allies. Italians and Germans are partnering with China on electric vehicles (EV), medical equipment and health technologies, offering Beijing a workaround to hollow the E.U. punitive tariffs on Chinese EVs.

The same is true of Japan and South Korea. China is by far Japan’s largest trade partner. Tokyo’s total trade with China is 33% greater than its trade with the U.S. And one-fifth of South Korean exports go to China.

The rest of Asia? China is ASEAN’s (ten Southeast Asian nations) largest trade partner.

The U.S. should focus on quickly getting back in shape its hugely mismanaged economy. And don’t worry if somebody abroad misbehaves. Use Jim Baker’s (former U.S. Secretary of State) national interest test: “Do we have a dog in this fight?” Also, rest assured, Pentagon has all the return addresses.