The Peterson Institute released a new Policy Brief, Preserving the Open Global Economic System: A Strategic Blueprint for China and the United States, by Arvind Subramanian, the Institute's Dennis Weatherstone Senior Fellow, on June 11, 2013. Joseph Nye of Harvard University and Kurt Campbell, CEO of the Asia Group, discussed Subramanian's proposals.
Subramanian proposes that the two countries strike a bargain: The United States would give up some of its power in existing multilateral institutions in return for China taking on greater global leadership to preserve the system's and the United States' real purpose of maintaining an open, rules-based, multilateral economic system. Such leadership would be consistent with China's domestic actions to rebalance and liberalize. By contributing to a stronger International Monetary Fund (IMF), China would be taking out insurance against global financial instability that would eventually be very costly for its own export-dependent economy.