President Trump and Chinese President Xi Jinping have now completed their first summit. Observers on both sides seem to be relieved. If no diplomatic breakthroughs on major issues were achieved, it is also the case that there were no outward displays of truculence from either side. Neither high hopes nor great fears have been realized. This leaves the question of where economic relations between the United States and China are going and where the United States should want to take them. As important as the resolution of any specific issue is the definition of the challenges that will be the focus of economic diplomacy going forward. Having recently returned from China, where I had a chance to meet a number of senior officials, I have become convinced that the issues that preoccupy many Americans are either invalid or of secondary importance. Meanwhile, the most important economic challenge posed by China is receiving far less attention than it deserves. Discussions by the United States of China’s alleged currency ma¬nipu¬la¬tion in the economic realm are what discussions of changing the one-China policy are in the geopolitical realm — unconstructive at best and possibly dangerous. While there is a case for the proposition that China manipulated its currency in an unreasonable way during the decade after 2005, by no stretch of any imagination is China today manipulating the renminbi downward for competitive advantage. Indeed, in terms of the volumes of reserves expended and the extent of capital controls imposed, few countries in recent years have done as much to try to prop up their currency as has China. More broadly, the United States’ economic future is shaped much more by policy choices made in Washington than those made in Beijing. To the extent that China trade has caused disruption in the United States, it is the result of China’s remarkable growth and increase in capacity to produce, not unfair trade policies. So focusing on China’s trade deficit with the United States is largely misguided. Yes, China subsidizes various exports to the rest of the world in a number of ways. But if the United States succeeds in stopping the subsidies or blocking the subsidized products, the result will be that companies will shift production to Vietnam and other low-wage countries—not create good jobs in the United States. Likewise, reducing Chinese trade barriers to products produced by American companies will indeed help these companies, but only a small part of the extra production will take place in the United States. American firms have valid complaints about requirements that they share intellectual property with Chinese partners when they invest in China, but if such concerns were resolved the result would likely be more outsourcing of production to China, not less. If currency issues are invalid and commercial diplomacy is unlikely to have much positive effect on the U.S. economy, what should be the focus of economic policy with respect to China? It is difficult to overestimate the extent to which China is seeking to project soft power around the world by economic means. Xi’s speech in Davos , Switzerland, in January, quoting Abraham Lincoln and laying out a Chinese vision for the global economic system at a time when the United States is turning inward, was the rhetorical edge of a concerted strategy. Of course there is Xi’s “One Belt, One Road” initiative, which envisions infrastructure investment and foreign aid to connect China and Europe. In a little-noticed development, the Asian Infrastructure Investment Bank, a Chinese-sponsored competitor to the World Bank, has announced that it will invest all over the world. Already, Chinese investment in Latin America and Africa significantly exceeds that by the United States, the World Bank and relevant regional development banks. And China will soon be the leading exporter of clean energy technologies. This investment will, over time, secure Chinese access to raw materials, allow Chinese firms to gain economies of scale and help China to win friends. The United States has chosen not to join the Asian infrastructure bank, to undermine rather than lead global cooperation on climate change and, if the president gets his way, to sharply cut back foreign aid. In doing so, it is accelerating a loss of its preeminence in the global competition for prestige and influence. Perhaps this development is inevitable, but it is a mistake to accelerate it. A truly strategic U.S.-China economic dialogue would revolve around the objectives of global cooperation and the respective roles of the two powers. It is important that such a dialogue start soon, but this move will require the United States to focus less on specific near-term business interests and more on what historians will remember a century from now.