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China policy a difficult balancing act for the U.S.

President Obama's trip to Asia will highlight some of the complicated regional dynamics that make U.S.-China diplomacy a delicate balancing act.

Chinese President Xi Jinping has lately been focusing on concerns closer to home like his anti-corruption campaign and reforming his country's economic system, but he's also eager to further develop China's relationships with the U.S. and other countries. And that will require addressing or artfully deferring some thorny issues abroad.

China has been embroiled in territorial disputes with its neighbors over areas in both the South China and East China seas.

"There's a risk, if the situation isn't handled with full appreciation of the downside -- if folks don't really take care as to what they say and how they act," Ken Lieberthal, a senior fellow and China expert at the Brookings Institution, told CBS News State Department Correspondent Margaret Brennan.

"In the South China Sea, there are a lot of smaller countries where China is claiming maritime territories that overlap with some of their claims. I frankly don't think that the chances of large-scale conflict are high there but it is a worrisome area especially if the U.S. and China have any kind of accident or incident that causes loss of life," Lieberthal said.

"The bigger danger is in the East China Sea, between China and Japan. There the militaries are more capable, and the stakes both sides consider to be very high. Neither side wants conflict but I think that the measures in place to manage how each side reacts to the other and to mange the situation if, God forbid, there is a clash and loss of life, those mechanisms are not sufficiently developed at this point," he said.

The East China Sea has a greater potential for rapidly escalating instability, Lieberthal concluded.

The U.S. risks getting drawn into the conflict because of its treaty obligations with Japan, which requires that America help defend Japan against an attack. The U.S. could be required to make good on that promise if there is a clash over a disputed set of islands in the East China Sea that the Japanese call Senkaku and the Chinese call Diaoyu.

American bombers fly over disputed islands in the East China Sea


Lieberthal said, "Both sides want to avoid an armed clash but accidents can happen, and we really need better mechanisms in place to reduce the chances of a situation where Japan ends up invoking that security treaty, and we face a choice of whether to get actively involved military, which can be extremely high cost, or decide not to, which would also be extremely high cost in terms of our alliance and credibility in the region."

Part of the challenge for the Obama administration, Lieberthal explained, is to make the U.S. presence in Asia credible without provoking conflict.

"That's a tough balancing act, in part because we don't control the actions of our friends and allies there. We encourage them to do certain things but we don't control them and so you want to prevent a tail-wags-the-dog kind of problem," he explained.

The balance of power in the region is shifting, in part because there are many strong nationalist leaders still affected by historical issues. The Chinese are also beginning to deploy military capabilities that have been in development for years, which raises tensions and concerns among its neighbors.

Outside of the military concerns, the Obama administration is still working to negotiate a major multilateral trade agreement called the Trans-Pacific Partnership. Outside experts have estimated that the deal could generate more than $120 billion in additional U.S. exports, but negotiations have dragged on for years over disagreements between the participating countries.

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