Quotes of the Day

On a frigid Feb. 28, 1972, in a whitewashed room decorated with jade ashtrays and a forlorn-looking potted plant, U.S. President Richard Nixon and Chinese Premier Zhou Enlai issued the Shanghai Communiqué, the delicate diplomatic accord that began the historic process of normalizing relations between the U.S. and China. Its signing marked the start of a remarkable four decades of U.S.-China ties, an era in which the fortunes of the two countries became inextricably connected. In 1972, there were barely any Sino-American economic links, and young Chinese couldn't imagine studying in America. Last year, trade between the nations was upwards of $450 billion, and nearly 160,000 Chinese attended U.S. universities, making them the largest foreign-student population in the country.

On Feb. 14, almost exactly 40 years after Nixon's trip, Xi Jinping, China's leader-in-waiting, will visit Washington for the first time since he emerged as the presumptive successor to current President Hu Jintao. While lacking the historical resonance of the 1972 summit — high-level meetings between American and Chinese leaders are now standard — the visit comes at the start of a year of intense political activity in both countries. Xi (pronounced Shee) will steadily assume power in China, and Americans will vote in a presidential election in November. And for all the economic and cultural ties between the countries, there are also points of friction on human rights, trade and security. How Xi approaches these issues when he is in Washington could set the tone for relations between the two nations in the coming decade.

In a fitting symbol of China's frenetic growth, the building where the Shanghai Communiqué was signed has been demolished, replaced by a structure that houses, among other things, a swimming pool and 10-pin bowling alley. But after decades of turbocharged development, Xi will helm a nation struggling to maintain the economic expansion that has kept the Chinese Communist Party (CCP) in power. The Obama Administration, too, is facing economic uncertainty during a critical campaign season. "Xi's debut with the American public is coming at a sensitive time for both China and the U.S.," says Shen Dingli, director of the Center for American Studies at Fudan University in Shanghai. On the eve of Xi's trip to the States, during which he will also stop off in Iowa and California — he has no plans apparently to visit Cambridge, Mass., where his daughter is enrolled at Harvard — here are the key areas in which China continues to both captivate and confound its most important partner and competitor:

Leadership
Communism as an ideological threat to the U.S. may have died along with the Soviet Union, but in China the Communist Party remains the all-controlling source of political power. Yes, Marx would recoil at the CCP's embrace of private ownership and market reforms. Yet instead of fading into irrelevance, the CCP is flourishing, with millions of cadres and a well-oiled propaganda machine. Even the next generation sees joining the party as a prerequisite for success. The biggest cohort striving to become party members is not laborers or farmers. It's university graduates.

Much of the CCP's current strength comes from the transformation of its leadership. The CCP of yesteryear depended on the giant personalities of Chairman Mao Zedong or economic reformer Deng Xiaoping. Today's party rules by consensus. This redirection away from a cult of personality-style leadership partly explains why little is known about Xi, a 58-year-old technocrat who first visited the U.S. 27 years ago as part of an agricultural delegation to Iowa. Xi is the son of a former party bigwig, making him part of the "princeling" clique of Chinese leaders. His second wife is a glamorous folksinger whose face is probably more recognizable in China than his. That's about as colorful as Xi's official biography gets. Presumably his experiences toiling in the countryside during the Cultural Revolution, when his family was punished for its elite background, have bred in Xi a predilection for social stability and economic reform — but those are educated guesses. What's clear is that Xi isn't likely to make sudden moves early on, lest he disturb the hard-won harmony between the CCP's ideological factions. Washington may have to wait for bold action.

Economy
Americans are used to regarding the People's Republic as a vast factory churning out Christmas decorations and cheap cars. In recent years they have also been warily eyeing China as a rising economic juggernaut with the potential to eclipse America. In 2010, China surpassed Japan to become the world's second largest economy. It is now the world's fastest-growing consumer market, biggest exporter and top foreign owner of American debt.

None of this has happened without the guiding hand of the CCP. Market reforms may have transformed China's economy but its state-capitalism model means that the government still protects the country's enterprises from foreign competition. This maddens the U.S. In his State of the Union address in January, President Barack Obama repeatedly targeted China. "It's not fair when foreign manufacturers have a leg up on ours only because they're heavily subsidized," he complained. His criticism may have been driven by partisan politics in an election year, but it also reflected a deeper unease over Chinese business practices, from obstacles to foreign investment to suspicions that Beijing is undervaluing the yuan in order to make its exports cheaper. "We're hoping that during future President Xi's upcoming visit to the U.S. we will get a greater sense of his attitude toward a transition to a market-based economy," says Christian Murck, president of the American Chamber of Commerce in China. "Because for four years or so, that reform project has been on hold."

The Chinese government takes a different line. "When the U.S. is in a financial crisis, we sincerely hope it will recover because our economies are so tied together," says Zhou Shijian, a senior researcher at Tsinghua University in Beijing and a former Chinese diplomat in Washington. And even though China's GDP has increased tenfold since 1978, Chinese officials caution about overestimating the country's economic might. With a per capita GDP of $8,400 (in purchasing-power-parity terms) in 2011, China ranks below the Dominican Republic and Thailand. We're still poor, goes the Chinese message to America. Cut us some slack.

Security
The Shanghai communiqué of 1972 warned that no power should "seek hegemony in the Asia-Pacific region." So far, so peaceful. But four decades later, China and the U.S. are potentially entering a new era of rivalry in just that part of the world. In January, Obama unveiled a strategic shift by the U.S. military toward the Asia-Pacific region. "We've made it clear that America is a Pacific power," the President asserted in his State of the Union address.

China wasn't mentioned in that context, but it doesn't take a foreign policy whiz to figure out that Obama's Pax Pacifica is designed to contain Beijing's rising influence. In recent weeks, China has stymied American diplomacy over Syria and Iran. And as China has more vocally pursued its territorial interests in contested waters, the U.S. has jumped to the defense of Asian nations that feel threatened, like Vietnam and the Philippines.

Still, Obama's focus on Asia has met with less bristling from Beijing than might be expected. Even sources that can be counted on to fulminate against American imperialism shied away. "There is no need to overreact," wrote a top Chinese military researcher in the usually pugnacious PLA Daily. But foreign policy makers must consider a new factor: an increasingly patriotic Chinese public. "Especially on the Internet," says Peking University political scientist Zhu Feng, "nationalist emotions have a big voice, and they have the potential to endanger good policy."

Human Rights
Each year, the U.S. releases a report on China's human rights. Last year's made for particularly grim reading. In the wake of the Arab Spring, Beijing clamped down on incipient protests in China by arresting dozens, the report noted. (Since then, around 20 Tibetans have set themselves on fire to protest Beijing's rule, in a sign of rising unrest.) Within days, the U.S. report was followed by China's own take on America's human-rights record. Beijing pilloried the U.S. for everything from high rates of violent crime to civilian casualties caused by the American military in Iraq and Afghanistan. The pair of reports staked out the two countries' drastically different priorities. "U.S. society values the rule of law, democracy, freedom and the protection of human rights," says Niu Jun, a Peking University professor who specializes in the U.S.-China relationship. "China believes what's important is social stability, collective profits and central authority." Beijing's perspective on human rights is simple: We have lifted 300 million people out of poverty, bringing food, clothing and Internet access to more people than the entire population of the U.S.

In 2009, while visiting Mexico, Xi went off script and voiced a common Chinese complaint. "Some foreigners with full bellies and nothing better to do engage in finger-pointing at us," he said. "First, China does not export revolution; second, it does not export famine and poverty; and third, it does not mess around with you. So what else is there to say?" The outburst was rare, but as he heads to the States, Xi will no doubt stick to the choreographed diplomacy that has characterized four decades of Sino-U.S. ties.

• Hannah Beech
• China's next leader makes a U.S. visit. A look at the issues that will determine its success