The U.S. has mismanaged its economic diplomacy with China for the past decade. There are some understandable, perhaps even unavoidable, reasons for this mismanagement but there are also mistakes that should be corrected. A good opportunity is the autumn visit to Washington, D.C., of the next Communist Party General Secretary, Xi Jinping. Vice President Biden is scheduled to travel to China in August to arrange the visit. The Vice President should use these exchanges to change the American approach.

One set of mistakes can be found in the institutional arrangements through which the U.S. engages with China economically. Senior American leaders of all partisan and ideological stripes speak as if China is exceptionally important to the American economy. This would seem to imply a high priority on having the right institutions to guide the relationship-being able to choose the right topics of discussion, to have the right people meet, and to make progress in a timely fashion. Yet the set of tools the U.S. uses to deal with the People's Republic of China (PRC) were built awkwardly, almost arbitrarily.

Improvement is possible. The management dimension of the relationship is overemphasized in institutional arrangements, while the strategic dimension receives little beyond lip service and grand dinners. The Sino–American economic relationship certainly needs managing, but changes must be made in order to avoid a strategic clash that could harm the U.S., severely harm China, and harm the global economy.

The U.S. should eliminate some of its unilateral reporting, reduce the ever-increasing number of bilateral dialogues, and de-emphasize many issues. This will help focus high-level diplomatic efforts on a few fundamental strategic objectives. In addition, new multilateral initiatives that do not currently include China, such as the Trans–Pacific Partnership (TPP), can be helpful in creating incentives for the PRC to make desired changes.