Many executives and small business entrepreneurs are of the opinion that China is growing into a major threat. IT services, Energy and Manufacturing industries are particularly concerned about the unfair competition due to China’s undervalued currency that has been artificially pegged to the US dollar to help prop Chinese exports to US and Europe. A G-7 meeting in Canada will most likely be a forum for discussing remedies for global currency imbalances, with a focus on the yuan. But can outsiders really do anything to influence China’s exchange rate?

China has also made signifcant changes in its education system. English language has become part of their core syllabus and students are much more fluent in English than a few years back. Add to it the advantages of subsidized government infrastructure, low cost labor, friendly taxation rules, and qualified young talent – China is most definitely a competition to take seriously for outsourcing services such as payroll, call centers, medical billing, answering services, etc.

Products and equipment are being manufactured in China and sold at lower costs than the cost of raw materials to manufacture in the US or Europe. Mining equipment, toy supplies, air conditioning and refrigeration equipment, and a slew of other products are manufactured on Chinese soil and exported all over the world to US, Europe and Asia. Recently, China just became the largest automobile manufacturer in the world overtaking Japan and Korea.

At the same time, China’s purchasing power has increased over the years, and in the global marketplace that is good news for all businesses as China becomes a consumer market for US companies and businesses to sell their products an services. However, can the rest of the world simply afford to wait for Beijing to make the decision to revalue the yuan and open its markets?

 America’s economy has been driven by its entrepreneurial spirit. Let there be no mistake, it is the spirit of its entrepreneurs and the infrastructure that made US an economic super power and juggernaut for the past century. However, the American entrepreneurial spirit is driven by freedom of expression, value creation and the betterment of our lives while Chinese entrepreneurs work within a social framework that includes an element of government control and lack of self expression. We just recently witnessed Google’s commercial retreat from China highliting that freedom of speech and privacy has limits in China. The US State Department has had talks with the Chinese Ambassador in Washington regarding the troubling issues related to cyberattacks on Google and that a “blanket denial” by China on the issue would not be helpful with regards to the broader aspects of US-China relationship.

However, the Google-China spat is unlikely to have any adverse impact on US’ broader relationships with Beijing…It is far more stable than it has been in some time. There are a range of issues where the countries have disagreements. But, there were many facets to the US-China relationship and a cross-cultural understanding could create healthy co-opetition which could help speed up a global economic recovery.