Undoubtedly, china is sailing in the right direction to be the world number one around the world given china has topped the international economic ranks as the second biggest economy after the U.S .Chinese leaders get understandably that china should pay much to lead the world politically, economically, and even socially –the last Chinese exhibition of arts proved jubilation that china is coming –beyond all reasons. The international agenda towards china is much interesting in tackling four topics-- trade and currency, technology transfer, the environment and global governance--to be addressed unanimously. China deserves to be dubbed as the coming monster threatening the big powers' thrones, I simply bending over backwards to formulate some points on this point. First: if we pick up the currency war between china and the other big powers around the world, we need to ask ourselves, is the Renminbi undervalued? China has intended to devaluate its currency (Renminbi ), a move encouraged by euro collapse which made the Renminbi much stronger, in another words, china supporting Yuan in a hidden way. The west has legitimate fears because it will be difficult to rebound and reduce the high employment rates unless china reevaluates its currency and reduce trade surplus. Ironically, a major appreciation of Renminbi could have a negative effect on the US trade balance because the cost of imports could rise and the production of many goods would simply shift to other emerging economies not the US. U.S trade deficits with china are actually an imbalance with Asia overall since the bulk of the goods are a collection of components that are ultimately assembled in china but imported from other countries. Most of the value parts of U.S imports from china actually come from other Asian countries. The US trade deficit with china is really a trade deficit with Asia .Recognizing this reality, a change in the Chinese exchange rate won't solve the problem that many are worry about in Washington, a real change requires a multilateral solution. Second: the Chinese high-speed train may stop due to the flagrant violation of intellectual property rights and Chinese restrictions on high-technology products market. China is thought to violate the WTO (WORLD TRADE ORGANIZATION) rules in organizing the high-tech market by offering subsidy to Chinese companies operating in china at many field such as clean energy,nevertheless ,it is unwilling to do so with any multi-national entity. There are many complaints from the systematic piracy attacks hindering many corporations from running well in the Chinese market, a few months ago; U.S president refers the case of American steel workers to WTO to settle the trade tension of American companies in china. Third : there are concerns about the inflation and asset bubbles in china ,inflation in china reached 6.8 percent hitting a board range of goods ,it get a lot of attention. There are many views whether reducing or exaggerating the inflationary danger in china, some think that inflation could get out of hand and lead to an economic crisis that will severely cut growth rates threatening an economic collapse. Others feel that inflation isn't a major risk but concern, as the price increases is largely centered on two areas –higher food prices triggered by bad weather and poor harvests the wider range of consumer products and manufactured goods. The danger of inflation is political sensitive but china has taken tangibles strides to gradually address this point through increasing supplies through more imports and releasing stock piles, tightening monetary policies by raising interest rates and placing restrictions on property purchases and development in order to decrease the so-called asset bubble in residential and commercial buildings, if these two measures work, inflation should fall in the coming months. Fourth: has china been able to rebalance its economy and increase domestic consumption? Many observers believe that china's unbalanced growth reflected in its low share of consumption to GDP (GROSS DOMESTIC PRODUCTION) and high investment rate is a major reason for global trade imbalances. Ironically, china is under intense pressure to reduce its reliance of exports and use stronger consumption to drive future economic growth but the fact is different because personal consumption in china has been going up by 8-9 percent annually for a decade--this is the highest sustained growth rate in the world--and to ask china to boost consumption even more isn't credible. The core of the problem is that “investment has been growing more rapidly than consumption and (GDP)”so the real issue isn't whether consumption should be increased or decreased, but whether investment levels are excessively high and becoming unproductive ,but china is concerned that if it scales back on investments. Growth will fall off too quickly regarding the investment is centered on residential and commercial real state. So, the ultimate vision is that china should focus on encouraging investments that improve livelihoods, such as low-cost housing, rapid rail transport, and improved social services, investment in social infrastructure offers an attractive option to keep domestic demand high enough so that growth can be sustained at adequate level to meet china current objectives. Fifth: the growing rival disagreement between china and US over international reserve currency proved jubilation that the dream of Renminbi to be international currency is coming true. Undoubtedly, the dollar isn't reliable as it has been in the past and there are concerns about his long-term strength despite reassurance from Washington that the dollar is on the right track. There are many countries would like to hold the Renminbi in reserve and china has allowed this in a few trail instances, notably, Malaysia and many more countries would jump at the opportunity--of course, policy like this needs decades of open financial system and liberalize capital flows--only after its financial institutions gained sufficient strength, the global financial crisis tipped the game balances. In the long term ,however, its clear that china now sees that internationalization the Renminbi is in its own interest as it will give china a greater say In international financial policy and reduce its reliance on the west .the Chinese aspirations could be countered by Washington desire because in this way, china is going to pull the carpet under the U.S politically and it could reduce American flexibility to run trade deficit , economically, at will end ,in the past, negative consequences of monetary and fiscal policies have been shouldered in part by other countries. Sixth: china has a very tough stance in exporting the rare trade earth materials and metals, this step might be politically motivated. China wants to increasingly use its own earth minerals as it looks to move to produce higher-end goods .A few years ago, china was exporting 75 percent for its own local production. These materials take its importance being an important a vital ingredient of many products like hybrid cars,batteries,solar panels, wind turbines and advanced magnets, the former are increasingly important in high-technology goods in great demand. On the other hand, the U.S has closed down many mines of rare earth materials due to its harmful impacts on the environment; nevertheless, china will keep going on that track. In a nutchell,win-win issues build wider trust and will help tackle the tougher matters, for instance Washington should focus on increasing Chinese imports—something that is already in the interest of Chinese consumers—instead of harping on the need for china to reduce exports, rather than taking solely about the contentious side of important issues—from trade to technology to corporate governance to the environment—china and the U.S should look for ways to foster a productive partnership and find common ground in solutions that benefit both sides.
