No sooner had the US aircraft made its emergency landing at Hainan Island off the South China coast than the blame game had begun. The Americans said the fault lay with the clumsy Chinese, while Beijing accused the US of a deliberate strike.
No matter who was at fault, the long-term impact of the collision on relations depends on what China does in the next few days.
The longer the US Navy's EP-3 surveillance aircraft and its crew of 24 are detained on Hainan Island, the deeper the rift between the two countries will become. Up to last night the American side had been refused access to the aircraft or the crew on the island known as China's Hawaii.
The weekend incident could not have come at a more delicate juncture in relations between the two countries, with a decision by the US expected in the next two weeks on the sale of sophisticated weapons to Taiwan; the recent defection of a senior Chinese colonel to the US; and the detention by China of a Chinese-born US-based academic in February.
China's most senior foreign policy official, the Vice-Premier, Mr Qian Qichen, visited Washington over a week ago for the first high-level meetings with the new administration.
A source close to the Chinese delegation told The Irish Times they were pleasantly surprised at how well briefed President Bush was, given his poor reputation on foreign policy matters.
The tone of the meetings was positive and cordial, and it was clear that neither side wanted confrontation at this stage in the relationship.
However, it was not all sweetness and light. The defection of senior Chinese Col Xu to the US last December was only made public during the visit and proved an embarrassment for the Chinese delegation.
Col Xu played a key role in setting up a programme to send senior Chinese military officers on short courses to Harvard University's Kennedy School of Government. He also got backing from the military to study at Harvard himself for a term in 1999.
Col Xu has expert knowledge on senior military figures in the People's Liberation Army. This information could be useful to the US in helping it form considered opinions on how Beijing is likely to react on a range of contentious issues which may crop up in the future.
Another touchy subject raised with Mr Qian by President Bush during the visit was the detention in China since February of a US-based Chinese scholar, Mrs Gao Zhan.
Mrs Gao, her husband, and five-year-old son were held at Beijing airport on February 11th as they returned to the US after a holiday in China. They were detained separately and the five-year-old did not see his parents for a month.
The boy and his father were released and returned to the United States on March 8th, but Mrs Gao is still being detained in Beijing.
Last week a Chinese Foreign Ministry spokesman said that Mrs Gao had acted as a paid spy for overseas intelligence and just stopped short of telling the US to mind its own business on the matter.
But far more serious is the issue of arms sales to Taiwan. A decision by the US on whether or not to sell a sophisticated package of weapons to Taiwan despite opposition from China is due this month. This will be the first major foreign policy test for the Bush administration, and could set the tone of US-Chinese relations for years to come.
China is bitterly opposed to the sale of weapons, particularly the Navy Aegis, which it fears will provide Taiwan with the basis for an eventual anti-missile defence system capable of blocking a missile threat to the island.
Yesterday the International Herald Tribune revealed that a confidential review by US naval officers has concluded that Taiwan needs a significant infusion of new weapons, including a radar system which China has put at the top of its list of arms it does not want Taiwan to have.
In his meeting with President Bush, Mr Qian made China's case against the sale of advanced weapons and repeatedly emphasised the sensitivity of the Taiwan issue in Sino-US relations.
China has indicated that it would consider Taiwan becoming part of a missile defence system as tantamount to reviving the US-Taiwan military alliance that the US ended in the 1970s as a condition for the establishment of diplomatic ties with China.
Yesterday there was a flurry of diplomatic activity in Beijing and Washington in an effort to resolve the issue quickly. US diplomats flew to Hainan Island to secure the release of the surveillance aircraft and its crew of 24.
They checked into their hotel on the island last night, having failed to get access to the aircraft or the crew.
There was speculation in Beijing that while the Chinese foreign ministry was in favour of a quick release in the interests of good Sino-US relations, senior military officers were not in such a conciliatory mood and were reluctant to surrender the prize of the aircraft and its crew.
Dr Brendan Smith, the Irish professor of international relations at Beijing's Chinese Foreign Affairs College, which is affiliated to the Chinese Foreign Ministry, warned that the incident should not be overplayed.
As China and the US size each other up in the early days of the Bush administration, there will be crises and difficulties, he told The Irish Times.
"There is nothing new about this. This latest incident will have short-term implications with each side, somewhat expectedly, pointing the finger of blame at the other."
Dr Smith said it was highly unlikely that there will be a reaction similar to that after NATO's bombing of the Chinese embassy in Belgrade in 1999.
"This is President Bush's first crisis of sorts in dealing with China and it would be important that the Americans handle it diplomatically and carefully since he will have other sensitive issues with the planned National Defence Missile System and the possibility of further arms sales to Taiwan," he said.
The next few days will tell whether it is a small storm over the South China Sea or a serious stand-off with long-term implications for relations between both countries.
Miriam Donohoe is Asia Correspondent of The Irish Times