Word: china
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...working with China in a way that can protect our interests is less about direct confrontation of the sort we remember from the Cold War - when the U.S. knew it faced a very dangerous enemy - and more about what we might call co-evolution. The phrase comes from biology and describes how some species work together to become stronger over time. A textbook example is the hummingbird and certain flowers, which, scientists have found, have evolved together to serve each other's mutual needs. Think of the long beaks on the birds and the narrow funnels on the flowers...
...struggles with China over the relative value of its currency capture this dynamic well. The renminbi - it means "the people's money" - is the place where China's control economy touches the free-market world. Just as tensions with the Soviet Union sharpened at places where systems collided, the same will be true of China: the renminbi is the new Berlin. It needs to be handled with appropriate sophistication by both sides, especially since it reveals a deeper tension. Chinese find it inconceivable that the dollar will be the only global reserve currency in 10 years; Americans find it inconceivable...
...Here's an example of where China wants to both secure its interests and avoid conflict. The real puzzle about China's currency isn't just the value of the renminbi. It is, rather, how open China will be to flows of money. China has three choices: it can remain unplugged from the global system, it can plug in gradually, or it can say, We're the largest developing country in the world and everyone wants to invest here, so we're going to make our own rules. This is the sort of challenge China will pose in many areas...
...follows that any actions by China that threaten global stability have to be rebuked. The habit of trying to make China cooperate only by granting concessions has not worked. Co-evolution suggests a different approach. It acknowledges the importance of giving China a say in how the world develops but demands in exchange an absolute commitment to curtail activities that make it more dangerous. It's a case of saying to China, You're a partner in managing the global economy, but you can't then manipulate your currency to gain unfair trade advantages. Or: We'll respect your interests...
...Part of the reason co-evolution could work is that it puts China alongside the U.S. in thinking about these new rules. That won't be easy. The U.S. is used to telling the rest of the world what to do. It will require energetic diplomacy. Practically, one item on Obama's agenda this week should be starting to retire the forum we now use for engaging China - something called the Strategic and Economic Dialogue - which is sort of like an annual parent-teacher conference with China. The slow-moving dialogue drives issues at a pace largely irrelevant to what...