But China's growing role on the world stage has also raised some concerns in the U.S. For instance, at the G20 summit in 2010, the IMF agreed to reform its quota and governance to reflect the increasing importance of emerging market economies. But the U.S. Congress did not approve the changes until the end of 2015. In October 2015, the IMF officially agreed to include China's RMB into its benchmark SDR currency basket.
As China rose to the second largest world economy, the country has grown in its awareness and responsibilities to do more in the world, although its initiatives are mainly in the economic arena, where most of its success comes from. For example, China put forward the "Belt and Road" initiative, which is about developing a vast new economic belt, stretching towards Europe in the west and facilitating maritime cooperation to the east. This, I believe, represents a new form of international economic cooperation for the 21st century. To support this idea, China has also promoted mechanisms such as the Asian Infrastructure Investment Bank (AIIB), which should improve global financing and governance. The U.S., however, became uneasy and saw these initiatives as a big challenge to the dollar-led global financial system. The U.S. administration viewed them with suspicion and objection, and even tried to dissuade its allies from supporting them. Nonetheless, as the Chinese efforts start to show positive effects, U.S. think tanks quickly moved to adjust their views and criticized the shortsightedness of the U.S. administration. It is possible that the U.S. may join these efforts in the future.
During President Xi Jinping's visit to the U.S. in September 2015, the two countries agreed to ensure an inclusive, resilient, and constantly improving international economic architecture to meet challenges now and in the future; China and the U.S. are committed to strengthening their cooperation in the IMF, and continuing to improve the IMF's quota and governance structure. They agreed that: "for new and future institutions to be significant contributors to the international financial architecture, these institutions, like the existing international financial institutions, are to be properly structured and operated in line with the principles of professionalism, transparency, efficiency, and effectiveness, and with the existing high environmental and governance standards, recognizing that these standards continuously evolve and improve."
At the G20 Hangzhou summit, the international financial architecture, particularly the reform and development of the international monetary system, will be important subjects to be reviewed by the leaders. It is expected that the summit will achieve important outcomes regarding how to build more resilient national financial architecture, open and prudent financial systems, macro-prudential policy tools and frameworks and inclusive finance. Information coming from China and the U.S. shows that the two sides are already engaged in thorough consultations.
China and the U.S. need to go beyond their differences and nurture the habit for cooperation, as they are increasingly aware that although they cannot solve all global problems, without their collaboration, none will be successfully solved.
Third, can China and the U.S. send the signal that they are willing to manage strategic differences and avoid security conflicts?
In the eight-year Obama presidency, there have been ups and downs in China-U.S. relations, yet with joint efforts, the two countries managed to keep the relationship constructive through coordination and collaboration. The past years have seen the economic ties quickly expanding and people-to-people exchanges increasing. Even the two militaries have improved their regular dialogues and agreed upon a code of conduct for close encounters at sea or in the air. Moreover, working with China in addressing global challenges will be an important foreign policy legacy of the Obama Administration.
There are also "negative assets." The most remembered would be the Asia Pacific rebalancing strategy, which has only deepened mistrust between China and the U.S.. It is noted in China that the American military has continuously reinforced deployment in the West Pacific, and reemphasized the exclusive military alliance system. Against this background, the U.S. has started to take sides in the South China Sea disputes and has decided to deploy the THAAD anti-missile system in South Korea. The U.S. is also perceived to be condoning Japan's move toward "military normalization," which is aimed at moving away from the post-WWII rules. All these signals are strategically important and will influence the perception and judgment of the U.S., with many in China have growing doubts about America's intentions.
