Washington and Beijing both consider good bilateral relations to be vital, but their growing strategic rivalry has the potential to evolve into mutual antagonism. Top leaders on both sides see building a new type of U.S.-China relationship as necessary to avoid a drift toward confrontation. Yet the competition of capabilities now under way between the Chinese and U.S. military forces in the Pacific does not conform to the strategic goal, articulated by both sides, of striking a stable and mutually acceptable balance between cooperation and competition. Active measures are needed by leaders in both capitals to resolve this discrepancy between policy and action.