WASHINGTON, D.C: US-China ties will remain “vexing and challenging” as Beijing’s new leaders face internal stresses due to a slowing economy and increasing distrust from their people, US diplomats said on Thursday (Friday in Manila).

“It will be the most consequential foreign policy challenge that we will ever face,” US Assistant Secretary of State Kurt Campbell told a seminar held in Washington, speaking about future relations between the two powers.

China and the United States, the world’s top two economies, are both poised on the eve of major decisions about the makeup of their leadership over the coming years.

Americans vote on November 6 for the next president, amid a fierce battle between President Barack Obama—whose administration has made Asia the new pivot of its foreign policy—and his Republican challenger Mitt Romney.

China’s political elite was also jostling for power with the Communist Party Committee meeting behind closed doors ahead of next week’s larger party congress that will usher in the country’s leaders for the next decade.

The US-China relationship will be “much more difficult than any relationship that we’ve had in the preceding years, largely because of its complexity,” Campbell told the forum organized by Georgetown University.

“It will be vexing and challenging,” he added. “My only recommendation, actually my hope for whoever follows in our footsteps, is that there is a recognition that good China policy is best done when it is embedded in Asian strategy.”

“Good China policy doesn’t mean just going to Beijing. It means working in the neighborhood, working to ensure that other countries are with you in dialogue and discussions on issues of mutual concern.”

Winston Lord, an assistant secretary of state from 1993-1997 who accompanied Richard Nixon when he became the first US president to visit Beijing in 1972, called it a “sweet-and-sour relationship.”

But he warned that China stood at a crucial threshold in its history.

“If they don’t make changes in their economic and political system in the next decade, I think you could see real instability, which could in turn lead to a more nationalistic and aggressive foreign policy,” said Lord, a former US ambassador to China.

Richard Solomon, assistant secretary of state from 1989 to 1992, agreed saying that China was entering “a very difficult period” and there was a “growing alienation of the society from the party leadership.”

“One way to put it is that the society has outgrown the political system that brought the revolution,” Solomon said.

Flourishing his cell phone before the audience, he said that there were an estimated 400 million mobile phones now in China.

“We’re dealing with a mobilized population. They know what’s going on, they know what’s happening in their society and the world,” he said, adding that Chinese officials he had spoken to are “feeling a lot of public pressure.”

The next generation of communist leaders “face some very fundamental issues about opening up the political process and dealing with a very substantial measure of distrust from the population.”

The panel at the seminar entitled Forging Consensus: US-Asia Policy in the Next Administration and co-sponsored by the Korea Economic Institute agreed that the next US administration had to stay engaged with Beijing.

But Christopher Hill, who preceded Campbell from 2005 to 2009, argued that there was still much that the United States did not understand about China.

He said that calling the scandal surrounding disgraced senior official Bo Xilai a tale of corruption was a bit like describing “Moby Dick” as a story about a whale.

“There’s a lot more going on there, and we need to try to understand it a lot better than we do,” Hill said.

And while he said that he did not believe that the country would break apart, Hill added: “I just don’t feel that China will continue to bubble along as it has. There are really some deep currents that are running.”