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Dissident's case poses diplomatic test for United States and China

But Texas-based ChinaAid said it “learned from a source close to the Chen Guangcheng situation that Chen is under U.S. protection and high level talks are currently under way between U.S. and Chinese officials regarding Chen's status.”

The incident will form an unwelcome backdrop for the visit of the U.S. secretaries of state and treasury to Beijing for their Strategic and Economic Dialogue on Thursday and Friday.

The reports of Chen's escape also come nearly three months after a Chinese official Wang Lijun fled into the U.S. consulate in Chengdu for over 24 hours, unleashing the Bo Xilai scandal that has rattled the ruling Communist Party months before a once-in-a-decade leadership handover.

Chris Johnson, until earlier this month the CIA's top China analyst, said Sino-U.S. relations were “almost approaching a perfect storm,” citing the Bo Xilai case, Chen's apparent escape and reports that the United States is considering selling Taiwan new F-16s in addition to upgrading its existing fleet.

“For the conspiracy-minded in Beijing, and there are plenty of them, they will see these things as completing the circle of a U.S. containment strategy designed to stifle China's rise,” said Johnson, now a Center for Strategic and International Studies analyst.

How China's leadership will try to resolve the problem hinges on the balance between such nationalist sentiments and a more pragmatic desire to avoid further disruptions to the Chinese Communist Party leadership succession this autumn.

For now, the scale tips toward a quick, quiet resolution, said Shi Yinhong, a professor of international relations at Renmin University in Beijing who specializes in U.S.-China ties.

“China does not want to allow this case to have a lot of influence because it is not good for its foreign relations or its domestic politics,” said Shi, adding that the countries have too much at stake to cancel this week's meetings.

“I don't think the United States will play this card to embarrass China. They still want to influence China on North Korea and Syria. They want to limit this case's impact because they know it is already embarrassing for China.”

The U.S. and China have found ways to disentangle knotty problems in the past.

On April 1, 2001, a mid-air collision between a U.S. Navy EP-3 signals intelligence plane and a Chinese fighter about 70 miles off Hainan island killed a Chinese pilot and forced the U.S. aircraft to make an emergency landing on Hainan.

The 24 U.S. crew-members were detained until April 11, and released after a the United States wrote a letter saying that it was “very sorry” for the death of the Chinese pilot and that the EP-3 entered China's airspace the landed without clearance.

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