China, US Should Transcend Economic Fears

China, US Should Transcend Economic Fears by Dan Steinbock

What Washington and Beijing need today is not fear about their real or perceived vulnerabilities, but confidence about their respective strengths and joint opportunities.

In his inaugural address of 1933, Franklin D. Roosevelt famously said that, “the only thing we have to fear is fear itself”. Those words provide guidance to the upcoming summit between Chinese President Xi Jinping and his US counterpart Barack Obama, which takes place under deepening economic challenges.

In the US, the concern is that China’s exchange rate adjustment could trigger a global currency war. In China, the concern is that the US Federal Reserve’s impending rate hikes could trigger detrimental capital outflows.

The meaning of China’s exchange-rate adjustment

On Aug 11,...