Is China Leaving the U.S. Behind in Entering New Economic Era?

NEW YORK (TheStreet) -- Here's are two future headlines we could see sooner than you think.

First: China's Currency Declared to Be Fairly Valued. 

Following that: China's Currency Achieves World Currency Status.

China is on the move and the world is entering a new economic era. One example that the U.S. may be getting left behind is the Asian Infrastructure Investment Bank, something the U.S. did not join and advised allies that they should stay out of. The advisement was not successful, and traditional economic allies like Italy, France and Germany joined.

The world is moving toward a new alignment where the United States is not the single world power, economically, politically, and militarily. This was bound to happen sometime, but accepting such a change is difficult. Actually adjusting the way a nation looks at the world and acting on this new vision is even more difficult.

The fact is, however, that China is moving into the realm of global leadership. It has been planning for this for years and the efforts that have been made are bearing fruit. (China is not there yet, and may stumble along the way, but, then, China is not the only part of the world that is moving into this new economic era.)

The next step for China? Having the world accept the fact that it is serious when it claims that it will adhere to its responsibilities as a major global currency.

When the U.S. advised other nations to stay out of the Asian Infrastructure Investment Bank, it argued that China would neither create nor maintain the level of credit assessment and management that a major world financial institution should aspire to. Obviously, the other nations that joined the bank did not feel the same way.

And now it appears there are others who believe that China is now managing the value of its currency in a more responsible way: The International Monetary Fund could be close to declaring that China's currency, the renminbi, or, more popularly, the Yuan, is being "fairly valued."

This is the first time in more than a decade that the Yuan would receive this grade. And, the assignment of this assessment would come in the face of continued American claims that China's currency is still undervalued.

The article cited above also reports that "Chinese officials have asked the IMF to include the Yuan in the elite basket of currencies that comprise the fund's emergency-lending reserves." This request will be considered later this year.

This is just one step in China's rise to greater economic prominance and power. It has moved on the Asian Infrastructure Investment Bank. It has moved to a more appropriate level for its currency. It is moving to "create a modern 'Silk Road' by better connecting its economy with those in the rest of Asia, the Middle East, Africa and Europe."

All of these efforts, among others, are aimed at achieving global recognition of the Yuan and eventually gaining reserve currency status. This latter goal is only a matter of time.

China still has the goal of achieving parity with the United States economically and its leaders understand that this is a long-term goal that will take time. While China keeps its eye on the longer-run, U.S. policymakers continue to fight old battles.

The U.S. can continue to claim that the Yuan is "significantly undervalued" but, like the Asian Infrastructure Investment Bank, it seems to be losing the support of its allies.

It is time for a re-assessment. The U.S. must look forward to the new economic era and begin to adjust its vision. Furthermore, it must adjust the horizon with which it views the future.

China's leaders are already thinking about 2025 while America's are fixated on 2016.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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