When the then American President Richard Nixon arrived in Beijing in 1972 to formalise a new Sino-American axis against the Soviet Union, he had reasons to proclaim that his landmark visit ?turned a page in history?. Chairman Mao Zedong was all eyes and ears to Nixon because he desperately needed the US to counter the mortal threat on China?s borders posed by the USSR.

This Sunday, when the sitting US President Barack Obama touches down in China for his first two-day state visit, the world will be paying heed because of an equally significant proposition, that is, a new Sino-American condominium to govern the world. Obama has reserved more than half of the time of his East Asia-wide tour to China, indicating American eagerness to further relations with this high-priority partner.

To soothe nerves of traditional ally, Japan, Obama organised his schedule to make a halt there first before setting foot in China. But his meetings with the Chinese leadership from Sunday will carry a lot more significance in the context of the predicted replacement of Japan by China as the world?s second-largest economy in the coming months.

A one-on-one between Obama and Chinese President Hu Jintao is practically a summit of the world?s two leading powers?the infamous Group of Two or ?G-2?. Asian powers, stakeholders in the global economy, and observers of world affairs will keenly follow Obama?s stints in Beijing and Shanghai.

The omens ahead of this summit, however, have not been very propitious for hopefuls of a ?G-2?. The US and China have been locked in a sharply escalating trade war over the course of this year, with several rounds of strikes and counter-strikes. The latest volley fired by the Americans in early November is 99% import duties on Chinese-made steel pipes as anti-dumping measures. China howled in protest and immediately launched its own anti-dumping probe into US auto exports.

Poultry, steel and tyres are the other commodities over which the two countries have been recently at trading loggerheads. For the Chinese, whose export sector has been badly hit by the economic downturn, every new American tariff or non-tariff barrier is a fresh stab that feels discriminatory and unwarranted. Although China has weathered the world economic crisis better than any other country, its policymakers know that high economic growth cannot be sustained in the long term through heavy state spending. Stimulus packages will have to end one day or the other and the onus will then be back on expanded domestic consumption and exports.

The long successful model of export-driven growth may have to be jettisoned by China because diversifying exports into Africa, Latin America and Asia will still not fetch the lucrative revenues previously offered by Western markets. In this context, keeping the American market open for Chinese exports remains imperative from Beijing?s point of view.

One of the demands China will raise before Obama?s delegation is to grant it the status of a ?market economy?. This is a cornerstone of Chinese diplomacy towards the US, perhaps far more crucial than Obama?s policy on meeting the Dalai Lama or arming Taiwan.

If China is given the market economy tag, the US will not be able to easily impose anti-dumping duties on Chinese exports under world trading rules. As long as China is branded a non-market economy, the US can use a surrogate market economy?s price of a product (say steel pipes) and declare the under-priced Chinese substitute to be a case of dumping.

At the root of the dispute is the question of how state-subsidised China?s manufacturing colossus is to enjoy an unfair advantage in producing goods at the lowest cost and then edging out competitors in exports. A market economy, by definition, gives its companies a level-playing field with peers in other countries by refraining from subsidies, tax benefits and currency manipulations that boost exports.

None of China?s main trading partners?the US, EU, Japan or India?has yet agreed to grant it market economy status, conveying that they believe China has a predatory export-promotion strategy. China argues that as many as 96 WTO members recognise it as a market economy and that the big four holdouts are being unreasonable. But a glance at these 96 members shows that their decisions to accord market economy status to China were entirely political and tied to soft loans and other side payments from Beijing.

India, too, understands the political nature of this determination and had hinted in 2007 that it might ?try to negotiate the border issue in lieu of giving China a market economy status?. The WTO itself, as an organisation, will only grant China this prized status in 2015-16 if it proceeds to dismantle its subsidy empire.

Given these ground realities and the protectionist pressures stemming from jobless growth in the US economy, the Obama visit is unlikely to result in any miraculous announcement granting market economy status to China.

What?s more, the much-heralded deal between the US and China on climate change to smoothen the Copenhagen conference of December is also unlikely to be inked during the Obama-Hu summit. The air in the US is, in fact, growing weary that the Chinese are leaping ahead in green technology production (solar and wind power equipment) and that this will add a new component to China?s already massive arsenal of exports, which leave a large trade deficit in its favour.

In the current harsh economic times, the US has transferred its anxiety of the 1980s about Japan?s automobile and semiconductor juggernaut to the new export behemoth, China. ?G-2? could stumble on the choppy seas of this trade war, not to mention the absence of compelling geopolitical rationales to forge another Washington-Beijing axis.

The author is associate professor of world politics at the OP Jindal Global University