The US announced on June 28 that China will receive a six-month exemption from unilateral US sanctions over imports of Iranian oil. The decision has helped avoid direct diplomatic conflict and possible trade war between the two countries, and is widely viewed as the result of compromise.

The US has actually displayed its policy flexibility on the issue. "A total of 20 world economies have now qualified for such an exception," US Secretary of State Hillary Clinton stated. Yet the truth is the US has failed to achieve its desired goal of  blocking Iran's oil exports. Many exempted countries haven't significantly reduced their oil purchases from Iran. At present, Washington appears to want to leave them well alone.

China has also reduced imports from Iran's oil imports, but the statement of the Chinese Foreign Ministry yesterday adhered to existing principles by stressing that Sino-Iranian oil trade is "reasonable and legitimate," and that China will not comply with US' unilateral sanctions against Iran.

It's a satisfactory result that maintains China's interests, saves face, and avoids an impasse with the US. The result can be seen as a victory over the US.

China should be more confident when dealing with the US in the future, be more determined when resisting pressure from the US, and tougher over compromise. We should speak out and voice our core interests and the bottom line, and not be too worried at the beginning about US reactions.

Yet we should also have clear understanding of US strength. The US is still the only superpower. In conflicts with the US, strategy is as important as principles.

The economic exchanges between China and the US are more intertwined than those between close allies. The political confrontation and military vigilance, however, are becoming increasingly intense. The two sides must reach a tacit understanding so that frictions can be kept under control and the sometimes sizzling emotions among the public can be properly extinguished by calm decision makers.

There is no surefire trophy in the diplomatic arena for any country, and aggression and compromise are commonplace in handling foreign relations.

Washington will deploy a subtle strategy, namely striking at and collaborating with China at the same time. China should take advantage of the strategy to defend its own interests and expand its capacity to act.

At the same time, China should also be cautious not to "force" the US to collide with it strategically. It will be the most interesting display of tai chi in our history, and we must pull it off with aplomb.