Despite taking office three years ago with a suspicious view of China, the Bush administration has forged what looks like, from the American perspective, the best relations between the two countries in three decades. In August, analysts and observers from China and the U.S. met at Fudan University’s Center for American Studies for the fifth in an annual series of meetings to assess the China-U.S. relationship and to see if that judgment was accurate.1 Although all the participants believe in the continuing value and importance of improved Sino-U.S. relations, we were disappointed to discover that perceptions of the relationship differed significantly between the two countries. To no one’s surprise, the biggest issue is Taiwan. While both countries understand the importance of the island to the relationship, there is a wide divergence in how the two governments assess the other’s handling of relations with Taipei. The difficulties are exacerbated by a profound lack of trust between the U.S. and China and an even deeper level of distrust between Beijing and Taipei. That distrust leads to the danger that “hedging” strategies in Washington and Beijing may create the negative outcomes they are designed to avoid.