Audio Transcript:

MARCO WERMAN: The showdown between Google and China comes at a time when there are several other irritants complicating the U.S.-China relationship. There is U.S. pressure on China to revalue it's currency, for example, or the Dalai Lama's visit to the White, and don't forget U.S. arms sales to Taiwan. And yet, the United States and China are getting ready to hold a strategic and economic dialogue in May. Professor Steven Goldstein is with Harvard's Asia Center. How are relations between the U.S. and China right not Steven Goldstein?

STEVEN GOLDSTEIN: Well I think that there's no question that they're going through a difficult period. The period is difficult on its face, but it's also difficult when compared to the first year of the Obama administration when it seemed as if we were going to break new ground, at least in the sense that we would have a President who would not, in his first year, have some sort of developing tension with China. First year seemed to have gone very well; the second year is not going so well.

WERMAN: Are we looking at right now seemingly minor issues adding up to a major problem?

GOLDSTEIN: No, I think these are important issues. The question is, are they new issues? And if they are not new issues, if these are lingering issues, then the question really has to be why have they become so apparently important at this stage?

WERMAN: Do you think these differences on some of these issues represent something bigger, something fundamental that's irreconcilable?

GOLDSTEIN: I wouldn't say irreconcilable, but I think that when we approach relations with China, we have to keep three things in mind. The first thing that we have to keep in mind is that we're dealing with two big, important powers that are at a different stage of development and occupy a different place in the world order. Secondly, we have to realize that in both countries policy towards the other is importantly conditioned by domestic politics. And thirdly, very simply, in two words "history counts", both for American perceptions of China and Chinese perceptions of the United States.

WERMAN: Its interesting, in recent years I think there's been a perception in the west that China embracing the free market and moving closer to the west, do you think this was a misunderstanding of the powers that are shaping China today?

GOLDSTEIN: No. I don't think that's necessarily a misunderstanding. There's no question that the free market has made advances in China. There are all kinds of reasons why it's surely not capitalism. But perhaps the greatest misunderstanding that we've had in the west, or many have had in the west, is that the emergence of these market tendencies will effect political change, will make China more like us, more democratic and therefore relations with China will be easier. None of those is true. China has not become more like us. It has not become more democratic and relations continue to be difficult.

WERMAN: Steven Goldstein a professor of Government at Smith College and an Associate at Harvard's Asia Center, thanks for speaking with us.

GOLDSTEIN: Thank you.