High stakes for U.S. in China standoff over Chen Guangcheng

(CBS News) WASHINGTON - The White House is trying to contain a potential crisis before bilateral talks between the U.S. and China kick off on Thursday after a prominent legal activist escaped his house arrest and reportedly took refuge in the U.S. Embassy in Beijing.

This one case about one man could seriously alter relations between the two nations. Neither side has confirmed the whereabouts of Chen Guangcheng, but sources tell CBS News American and Chinese officials are involved in frantic negotiations to reach a deal on the blind, self-taught lawyer's fate.

There are two basic options; Chen could be allowed to remain in China with the government guaranteeing his safety and the safety of his family, or an agreement could be reached for him to leave China - likely for the United States.

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The talks will be difficult, as China considers Chen a criminal, and now an escapee, but both sides have said the issue will not overshadow the economic talks later this week.

With Obama already facing criticism from his Republican rivals for his stance on China, the White House will really want to get something agreed to secure Chen's safety before the talks begin.

The U.S. needs China's help in dealing with Iran, North Korea, and Syria, particularly in light of Beijing's veto-wielding seat on the U.N. Security Council.

Given the timing, Chen could represent the most significant challenge to U.S.-China relations since Beijing's infamous crackdown on student protesters in Tiananmen Square.

For more on the White House's China challenge, click the player at top to see Norah O'Donnell's full report

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