I am a Chinese. And firstly, please forgive my poor English.
Having read this article, I think what the author wants to express is what China should do first--in fact it seems to be acting in a U.S way. Well, I donnot believe so.
We are a huge country, and if you pay a visit here for even a week you will find that Chinese is not too difficult to speak with and that, we also face a lot of domestic problems.
Do you think that we should also pay great attention to domestic problems?
And Since China bears so many people, I am afraid that the domestic problems is too difficult to handle with, this is also a common Chinese's concern.
If you want to express something about China, please pay a visit here first.

I am sorry, I have to go to class now, and again, I am sorry for my poor expression.
Thank you.

Your points about China's geopolitically calculated purchase of Spanish debt and its "carefully orchestrated" currency policy give Beijing far too much credit. Financial Times, Naked Capitalism, and Jack Barnes all had articles today about the perfect storm brewing within China, of forex hoarding, hasty wage increases, and the inflation that underpins all of it.

http://www.ft.com/cms/s/0/0c78740a-1cef-11e0-8c86-00144feab49a.html
http://www.nakedcapitalism.com/2011/01/is-inflation-about-to-burst-the-chinese-bubble.html
http://jackhbarnes.com/2011/01/11/china-worlds-fastest-printing-press/

The currency policy, as it stands, necessitates that China dump additional yuan onto the domestic market each time it accumulates additional forex (usually USD). Such a policy makes no sense in a country whose foremost economic ill is galloping inflation, unless of course, it is there merely to foster the easy monetary climate that leads to artificially high growth rates.

From the FT article:

"If China were to follow Japan, the next stage would be labour strife and inflation. The best way to avoid that outcome would be a radical tightening of the current super-easy monetary policy. But that would risk a serious slowdown and probably necessitate a large revaluation of the renminbi – both anathema to Beijing."

It has put off serious, substantial revaluation for years. The funny thing about the market, though, is that ultimately corrects imbalances, regardless of what any allegedly all-powerful state, like the PRC, tries to do.

From the Naked Capitalism spiel: "But, what if the they don’t? Inflation can take off and thereby begin to ERODE the competitiveness of Chinese exports. Nouriel Roubini pointed out this issue in 2007: if China didn’t revalue, inflation would do the trick regardless. A continued high rate of inflation relative to its trade partners would push up the price of goods in home currency terms, which in turn translates into higher export prices. This might be the real reason why China is so reticent to revalue its currency. The Americans might go crazy if the Chinese devalued, but if the inflation is high enough, they might have to do it, as it will severely erode their terms of trade and cause their tradeables sector to collapse."

Does that sound like a state that has carefully, rationally accounted for every last contingency?

The Spanish debt investment is foolish. From the Jack Barnes article:

"They are so dependent on demand growth, they have decided to try and prop up the European bureaucrats with fresh capital. These new private placements in European Sovereigns will help keep Europe from dissolving into a mess this winter, while allowing the problems to fester at both ends longer.

Combined, when Europe does shatter, it will hurt the China worse. They will have thrown away their national savings, on buying debt from an international organization that is dissolving under its own weight in front of everyone in the world. The leading party will have used up internal domestic creditability by publicly propping up a coalition of the unwilling to be economic governed with Chinese home savings."

How desperate is it to bail out Spain just to maintain some semblance of European demand to soak up China's trade surplus? Or perhaps China subconscoiusly sees a semblance of itself in Spain:

http://www.nytimes.com/2010/12/18/world/europe/18spain.html?pagewanted=all

You've missed some very significant events here.

All these events - It’s about oil

We’re not running out, but demand is going up rapidly and we can’t increase the supply fast enough. It’s like 5 people fighting over 3 cookies, then 2 people join the fray.
The scientists don’t know how to drill deepwater oil properly – which is why we had the Gulf spill wasting half the well, and they don’t know how to make tar sand economical

Korea was a proxy warning from China. The US had no choice but to militarise after the midterms – and the world realised the US wasn’t going to reduce oil consumption. France-UK signed a joint nuclear testing facility, and India is building a nuclear arms triad. China is the biggest alternative energy investor, accelerating energy independence. But China also has huge nuclear capability – it’s impossible to stop (over 1000 missiles) even with a missile defense shield. Even if you could, over 200 nuclear bombs going off is enough to mess up the world by dispersing radioactive particles around the world (cancer/deaths/etc).

The good news is, after Korea, both China and US realised they couldn’t risk nuclear war. So for the first time after 16 years of failed climate talks, China backflipped, changed its hardline approach, agreed to all the US’s demands, which allowed both to sign the Cancun Agreements (their first ever climate commitment).

After Cancun, China signed a FTA letting the US sell high-tech renewable products to China. China also promised to spend $1.5 trillion on foreign (i.e. US) made renewable products, increasing jobs for families, pay off debt and restore American power. China recently killed its own auto industry by banning its citizens from buying cars. Nuclear war benefits no one, so out of self interest, China is helping the US, even though it’ll slow Chinese economic growth.
US needs a carbon price to create jobs and pay off foreign debt.
But voters realise it means higher prices, and are blocking it, without realising they’re provoking a nuclear war. People don’t transition out of goodwill, you need to raise prices. Recently, China opened its banks to the US. China also just signed with an American solar company First Solar Inc, to build its Inner Mongolian solar plant (the world’s largest) – it was a taster of China’s promise to spend $1.5 trillion on US renewable products.

But why Carbon taxes/trading? consumer based free market mechanism (i.e. prices). It’s either asking oil-intensive consumers to pay $100, or every consumer to pay $1. It needs to be done, but which is easier?

The political situation is just that, too political, it needs to change fast and get practical so that these carbon taxes can be passed to accelerate the renewable industry, create jobs, help families, and pay off debt.
China even agreed to remove its own wind subsidies (with lots of compliants within China) straight after the Obama administration complained it was stopping US investment in renewables, and it’ll be interesting what the visit by Hu Jintao produces on these issues (the Hu visit might be the most important since Deng Xiaopeng in 1979, when the PRC abandoned Mao’s Communism for good old American style capitalism).

The Cancun Agreement was not binding – this sucker needs to be legalised at the next climate summit.

I’m no Democrat, leftist or rightist, but this ain’t about Democrats or Republicans, this is about getting what needs to be done, done – practicality and ensuring prosperity, as well as avoiding this Cold War your touting – all this political talk about defense and building up missile defense shields is worthless, because it doesn’t stop a nuclear winter or nuclear fallout, besides, no nation is stupid enough to let their second strike capabilities falter, something will crack, economically or proxy-like if and as tensions continue. A true patriot would let off the political baggage and do what’s right for the country.

There's a reason why Obama will be bringing up renewable energy subsidies and trade with Hu Jintao. It's also interesting that during Gate's visit, Gen. Liang, in rebuffing nuclear talks, instead referred to the strategic economic dialogue. An indication the PRC leadership may see restoring trade imbalances and energy cooperation as the only solution to nuclear tensions. Which brings me to another point of the CCP's active efforts to allow the Yuan to appreciate. If you look over the past month, you'll find things like China allowing JP Morgan to invest in the Chinese banking sector (after six year ban), China taking an interest in US train lines, as well as China demonstrating it's willingness to give money to nations in renewable energy contracts (i.e. UK, Scotland, etc). China is also preparing for the worst, that the US doesn't take steps to reduce oil consumption (i.e. modernising its second strike nuclear capabilities, Russian-Chinese pipeline, geopolitical agreements, securing Shell oil contracts, etc). The key to avoiding Cold War II is clearly energy cooperation between the US and China.

Might be interesting to follow how the Obama administration is securing US energy security by trying to catch up with China and India on high tech industries. Recently, 800 American solar energy jobs got shipped off to China, with CEOs citing a better energy policy in China – so whilst they get into manufacturing new industries, America is being left behind because of poor Energy policies stifling American competitiveness against China. Of course, we can gamble on another oil spill and waste the last half of the Gulf oil well whilst India spends $630 million in deals with Germany/Japan to fund solar projects and secure energy security in India, and China restructures its electricity grids to support alternative energy and electric cars as well as a budget to spend $1.5 trillion on buying foreign high tech alternative energy goods. America is paling in comparison because of divisive politics. The pure politicising of these issues, and the lack of US moderates who can unite both sides of the political divide on Energy policy looks bleaker each day as the House Reps start gearing up on domestic issues.

Obviously the US needs to drill the oil in the Gulf and other deepwater sites, but only when they can do so without such a high risk of spills and waste. In the meanwhile, an Energy Bill or policy guarantee is long overdue in the US.

Yes, it really is. To the extent that Sino-U.S. relations and next week's summit in Washington can be boiled down to a single word, it is all about oil.

And regarding the alternatives that 137jason alludes to above (government support of the renewable energy sector or yet another arms race) the latter is a bit more subtle and insidious than meets the eye. Because the nuclear arms race that has already begun between China and the U.S. is far different than what the world saw in the 20th Century between the U.S. and the former Soviet Union.

The Sino-U.S. arms race is not being played out in newspaper headlines or in official statements between Washington and Beijing. And the "score" is not so much stockpile numbers in the U.S. or within the borders of the People's Republic--as it was during the Cold War. The new race is about Beijing's propensity to proliferate these same weapons and the technical know-how and hardware that makes them possible. North Korea, Pakistan and--yes--most recently Saudi Arabia.

It's about ready-made nuclear warheads, the delivery systems (missiles) that take them to their targets, and the technical expertise that's required to stand up and maintain such doomsday capabilities. It's a sick chess match, really, the legacy of the likes of Curtis LeMay and all those who bought into the end of days paranoia that gripped the world following WWII.

The world's leaders in Washington, Beijing and elsewhere can either acknowledge this and start their economies down safer (and saner) paths paved with renewable energy resources, or they can continue to grease that same path with oil--bought and paid for with the illusory security of nuclear weapons. www.renewnptnow.com.

The Chinese have already sized up Obama. His foreign policy for the last two years of bows, apology, and appeasement must have confused them initially, then left them snickering, and now they are taking full advantage of it. The Chinese undoubtedly think that Obama's weakness is driven by U.S. decline, and the economic damage Obama has inflicted on the U.S. gives huge support to that view. How anyone can turn that around at this point is beyond me?

US-China relationship is heavily tilted in favor of China even if David Rothkopf does NOT agree.

China has US by the tail - US businesses are hooked to huge profits that cheap Chinese products generate for them as a walk through any Walmart, Home Depot, Sears and Macy’s filled with Chinese goods prove and US government is hooked to huge investments that China makes in US treasuries from the sales of cheap Chinese products to US businesses.

Second cold war between US and China has already started even though Henry Kissinger would not like to call it that. If US had a upper hand against Soviet Union is the first cold war, then China has a upper hand against US in this second cold war.

China’s rise to super power status to challenge US is a fitting monument to the much-celebrated foresight of Nixon-Kissinger to embrace China to counter Soviet Union in 1972 just as 9/11 attacks is a fitting monument to Reagan embracing Islamic fundamentalists to counter Soviet Union in 1980s Afghanistan.