As China Moves Up, the U.S. Needs a New Game Plan

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China flagWhen U.S. Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner visited China last week, one of their top priorities was to press the Chinese government to create a more level playing filed for Western firms, which operate at a disadvantage to Chinese state-owned companies.

"For trade to work in any economy and for it to produce the benefits we know it can, there must be a level playing field where domestic and international companies can compete freely and openly," Clinton said.

As Ian Bremmer points out in his new book, The End of The Free Market, China's embrace of "state capitalism," in which the government is the main actor in the economy, poses a threat to U.S. competitiveness, as well as individual U.S. firms operating abroad. In an interview, I asked Bremmer to asses the chances of Clinton and Geithner successfully convincing the Chinese government to create a more level playing firm for Western firms.

"The Chinese government doesn't need the Americans the way they used to," says Bremmer. "China is feeling much more assertive but also feels like they must decouple actively away from the United States to ensure their own economic growth and therefore their own political survival. That is an environment that the U.S is not used to dealing with."

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