US Treasury Secretary Timothy Geithner's visit to Beijing sets a positive tone for the development of Sino-US relations in 2012.

Frequent high-level meetings and communication helped Sino-US relations remain relatively stable last year, although there were some disputes and friction, most notably the US' increased military presence in the Asia-Pacific, and its announcement of the sale of a new package of arms to Taiwan, which led to bilateral military-to-military exchanges being suspended until the 12th China-US Defense Consultative Talks in December.

But as the first cabinet-level official to visit China this year, Geithner's visit sends the message that despite the clamor that in the US that it should contain China and allegations that China is trying to exclude the US, the two can still cooperate with each other.

According to the Treasury Department, Geithner will discuss strategies to revitalize global economic growth and efforts to support fair competition in global trade. So his visit is likely to provide indications of greater bilateral cooperation on the global economic and financial front.

Domestically, the US is experiencing a slow recovery and its growth is heavily dependent on its exports to Asian markets, and to maintain its financial sustainability, the US needs countries, including Japan and China, to continue buying US treasury bonds.

Meanwhile, the euro crisis is far from ending and its effects on the global financial market are gradually becoming manifest. Hence both the US and China need to take precautions to prevent it from affecting their economic growth.

What makes the situation even more complicated is that both countries are undergoing economic structural transformation and there is growing domestic pressure for protectionism and economic nationalism. This is especially true of the US, where Congress is eager to use China as a scapegoat for their incompetence in managing trade and economic issues. But although some officials in the Obama administration have joined the China-bashing game, top China hands within and around the White House seem to be more clear-minded, which is why the yuan-related currency bill was shelved in the House of Representatives and the Treasury Department has not labeled China a "currency manipulator".

It is likely that Geithner will press China for a stronger yuan, and urge the Chinese government to adjust its monetary policy to stimulate growth and balance bilateral trade.

Sanctions on Iran will be another major topic for Geithner when he meets his Chinese counterpart, and differences are predictable. On the last day of 2011, Obama announced tough sanctions targeting Iran's central bank and financial sector. The proposed sanctions would cut off financial institutions that work with Iran's central bank from the US financial system. The sanctions aim to reduce Iran's oil revenue and thus force the country to abandon its suspected nuclear weapons program.

However, China will not support this for both practical and ideological reasons: Iranian oil comprises a large proportion of China's oil imports, and alternative oil suppliers are not easy to find; and China believes sanctions or the threat of war are always the last resort in resolving issues like Iran's nuclear program.

China is not the only country that could be negatively affected by the sanctions. Japan, India and European countries are all vulnerable to the consequences of a possible embargo on Iranian oil.

The US has grown accustomed to dictating the moves of the international society and it takes it for granted that its allies and partners will follow its lead. But it should bear in mind that the world is rapidly changing.

Prior to Geithner's visit, Assistant Secretary of State Kurt Campbell visited Beijing and discussed recent developments on the Korean Peninsular, and Vice-President Xi Jinping is expected to visit the US in February.

Hopefully, such high-level visits from both sides will help make sure that Sino-US relations stay on the right track.

The author is associate research professor at the China Institutes of Contemporary International Relations.

(China Daily 01/11/2012 page8)