China’s foreign policy under the leadership of Xi Jinping took a shift from conservative to more liberal political and economic strategies. This change in policy evidently shows the intention of China of being proactive in international politics at strategic level in general and economically in particular. This study addresses a key question that focuses on China’s new liberal role in international politics and economics. It also addresses the US perception about re-emergence of China as an economic power and the US reaction to its growing influence. It describes the US both potential economic as well as defence that is unmatched and still largest in the world but China has come up with its own kind of potential like enormous economic growth and optimum utilisation of human resource.