China and the United States have just experienced political transitions that allow the leaders of both countries to focus on bilateral relations free from the pressures of domestic political campaigns. But the domestic politics of the bilateral relationship inside each country are, like the structural tensions between the established power and the rising challenger, intensifying, as Washington takes new steps to assert its primacy in Asia and Beijing works to edge America out of its neighbourhood. US-China relations are likely to be less stable and more prone to conflict over President Obama’s second term, unless the two nations can arrive at a modus vivendi to keep the peace in Asia. The challenge is that such an entente likely requires the kind of political change in China its leaders seem determined to block for fear of the threat it would pose to their own legitimacy. The reverberations of a relationship that is conflict-prone, but in which conflict holds such downside risks for both countries, will be felt well beyond Asia.