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While China's trade imbalance and currency valuation are in a process of gradual rebalancing, the central question now facing China's economy is how to begin producing higher technology exports.
The United States and China have already seen an improvement in bilateral ties in the months leading up to President Hu Jintao's visit to Washington and this positive momentum should be maintained going forward.
During Chinese President Hu's state visit to Washington, he and President Obama will likely discuss the four key economic issues of currency revaluation, the trade balance, China's domestic imbalances, and the internationalization of the renminbi.
A major adjustment of China’s currency by itself won’t solve U.S. economic woes, but other approaches—including internationalizing the renminbi—would benefit both sides.
For President Hu Jintao's state visit, a host of economic, political, and security issues top the agenda, including China's growth strategy, accusations of currency manipulation, territorial water rights, and North Korea.
Chinese President Hu Jintao's upcoming state visit will provide an opportunity for U.S.-China relations to move past a period of tension and develop forward momentum on key issues of mutual concern.
Chinese economic growth in 2011 will likely resemble that of 2010, while European debt struggles continue and the United States slowly readjusts. However, China's underlying structural imbalances will lead to a sharp slowdown in its growth in 2012 and beyond.
Confronting the global challenges in 2011, from the ongoing war in Afghanistan and a rising China to continuing international economic turmoil, will require an understanding how much has changed and the extent to which the center of gravity in global power has shifted.
Although China's growth next year is likely to remain high, expectations for China's average growth over the next decade are being revised downward.
China's economic prospects remain sound, but many observers point to the risk of an "unbalanced" growth process that has spurred investment and kept domestic consumption low.
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