Asian leaders are also talking about broadening regional free-trade agreements, which meant to be the main topic of conversation at the Association of South East Asian Nations summit before the conference was canceled due to protests in Thailand.

China has pledged 40 billion dollars to the International Monetary Fund, agreed to participate in a far-reaching cleanup of the global banking system, and committed to continue buying US treasuries, which would allow the US to maintain its stimulus spending so that the Obama administration can tackle today's economic crisis and lay the groundwork for long-term economic recovery and lower federal deficits.

Furthermore, China is also laying the groundwork for a more stable trade and investment relationship with the US and its other trading partners.

China unveiled plans last week to use its currency to settle foreign trade in five major Chinese cities, starting with Hong Kong. The new system will allow companies to avoid risks in foreign exchange fluctuations and transaction costs, and speed up settlements, according to the Bank of China. The move would also make the yuan gradually more useful across Asia and modernize China's currency system.

Still, the most daunting challenge for China remains the collapse of its export industry. China saw its exports fall for the fifth straight month this year, dropping 17.1 percent in March compared to the same month last year. Whether the economy will be able to maintain the needed growth in the face of declining demand in Europe and the US remains the big question. Even with its hefty stimulus spending this year, China will need demand from the rest of the world to sustain its current recovery. That's why it has a vested interest in the buoyancy of its East Asian and western trading partners' economies.

China's recovery and the development of a broad, prosperous middle class in the country will be good for the US. A more prosperous China and an expanded middle class provide an additional market for US goods and services, and will ultimately improve American living standards. The Center for American Progress terms it a "virtuous circle" of strengthening global living standards.

The US leads the world in healthcare innovation, anti-pollution practices and technology, and green technology, all of which will be needed in any meaningful and sustainable recovery plan in China.

As our paper "A Global Imperative: A Progressive Approach to US-China Relations in the 21st Century" notes, helping China help itself, protect its environment and care for its people is a win-win for the citizens of both countries.

The author is a Research Associate for the National Security and International Policy team, the Center for American Progress.

(China Daily May 7, 2009)