Washington: China's hopes to easing of tensions with the United States was floundered after American fighter jet shot down the Chinese "spy" balloon that had floated across the country, writes Chris Buckley in The New York Times (NYT).

Beijing registered "strong discontent and protest." But there may be little it can do to retaliate.

The reaction from Beijing -- defensive, angered, yet hedging its options -- illustrated the challenges facing China's leader, Xi Jinping, as he tries to stabilize relations while giving little, if any, ground, said Buckley.

A high-altitude balloon from China carrying a payload the size of three coach buses equipped with what American officials have described as surveillance equipment was spotted over the continental US, visibly hovering above a state with key military assets and ultimately sparking an international incident.

China maintains the vessel, which was shot down by the US over the Atlantic Ocean on Saturday, was a weather balloon thrown off course. And it has shown signs of both being caught off guard by the incident and wanting to stem the potential damage, analysts say, not only framing the situation as the result of factors beyond its control, but also offering a rare expression of "regret" over it in a statement Friday.

Beijing's reaction to the bipartisan furore in the United States over the high-altitude balloon suggested that Chinese leaders were baffled that those planned talks in Beijing had been upstaged by what they described as an innocent mistake.

Chinese officials had been preparing to host the U.S. secretary of state, Antony J Blinken, for talks this week in Beijing aimed at containing tensions over a glut of issues: technology barriers and bans, Western opposition to hard-line Chinese policies in Hong Kong and Xinjiang, and American support for Taiwan, the self-ruled island that Beijing has demanded must accept unification, reported NYT.

Blinken pulled out of his trip to China, citing anger over the balloon.

"China is in a very tight geopolitical spot," said Evan S Medeiros, a professor of international politics at Georgetown University who served as President Barack Obama's top adviser on Asia-Pacific affairs.

"They were caught red-handed with no place to go. And during a moment when they want to improve relations with many big powers, principally the US," added Medeiros.

Meanwhile, Xi has his hands full with domestic strains and may want to avoid another round of tit-for-tat antagonism with the Biden administration, said Buckley.

China's economy is anaemic after the abrupt abandonment of Xi's strict "zero Covid" policies, and the government is also trying to defuse a longer-term real-estate crisis.

Moreover, the US' tightening restrictions on sales of advanced technology to China, especially cutting-edge semiconductors, could hurt Chinese companies and Xi's innovation plans.

Since beginning a third five-year term as party leader in October, Xi has tried to ease tensions with Western countries -- including the United States, Australia and European powers -- worried that they are coalescing into a firmer alliance committed to containing Chinese power, reported NYT.

Despite its mention of possible further actions, the Chinese government's response to the balloon's downing also hinted that it does not want to drag out the dispute.

Notably, the Chinese statement accused the United States of violating international norms by shooting down the balloon, but did not mention any claimed violation of international law, said Buckley.

China also said it would "defend the legitimate rights and interests of the enterprise involved" with the balloon, which could help it make a case that the government was not directly involved in launching the balloon.

Moreover, the fraying ties between Beijing and Washington may come under much heavier stress if Kevin McCarthy, the new House speaker, visits Taiwan.

Upon taking up his role, McCarthy had said earlier that he might visit the island, seeking to demonstrate Washington's support for Taiwan against threats from China, but he has not announced any firm plans.