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Within days after the summit between President Xi Jinping and US President Barack Obama, experts were trying to figure a way to instill greater cooperation and power-sharing between the two countries.
Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics in Washington, said he is worried that despite their economic cooperation, economic skirmishes between the rising power and existing power could undermine global financial institutions.
The best way to preserve the current global system is for the two countries to strike a great bargain, he said.
"Essentially, this means the US giving up power in existing multilateral structures and multilateral institutions. I think, in return, China's stake and incentive in preserving this open system will be reinforced," Subramanian said on Tuesday at a seminar at the Washington-based Peterson Institute for International Economics.
Subramanian said the US and Europe often talk about what China should do, but overlook what they should do themselves.
Washington should work to increase China's power and influence in financial institutions such as the IMF and the World Bank, putting Beijing on a par with the US and Europe, the former IMF economist said.
He said that Europe, which is now a debtor, has 30 percent of the voting rights and veto power at the IMF, and that's too large a stake. "If everyone has veto power, so should China," Subramanian said.
Chinese Ambassador to the US Cui Tiankai said in a recent interview with Foreign Affairs magazine that China has integrated into the global system and is ready to integrate further as well as follow international rules.
But he added that because some of those rules were set half a century ago and without China's participation, they are outdated.
"What we want is not a revolution," Cui said. "We stand for necessary reform of the international system, but we have no intention of overthrowing it or setting up an entirely new one."
Subramanian also suggested that Washington should actively promote the rise of China's currency as an international reserve currency.
"If the renminbi were to become a reserve currency, China would be reluctant to jeopardize that by closing its markets to foreigners or expropriating property," Subramanian said
In a paper on Peterson's website early this month, Subramanian argued that China will be willing to take on additional responsibilities because its rebalancing strategy - from an investment-driven to a consumption-driven economy - will require a new round of liberalization. He said this will include reform of State-owned enterprises and the opening of the financial markets.
"This is also what outsiders want and an open trading system needs," he said.
About the broadcaster:
Lance Crayon is a videographer and editor with China Daily. Since living in Beijing he has worked for China Radio International (CRI) and Global Times. Before moving to China he worked in the film industry in Los Angeles as a talent agent and producer. He has a B.A. in English from the University of Texas at Arlington.