A team of experts from the International Monetary Fund is visiting China this week to help determine whether the yuan, also known as the renminbi, should be designated an official reserve currency.
"On Monday and Tuesday, the IMF team was scheduled to hold technical discussions in Shanghai with officials at the Chinese central bank and China Foreign Exchange Trading System, which oversees currency trading in China," The Wall Street Journal reported.
China still has work to do to achieve this goal, but it is on the way to and is making promises about the changes that are coming in order to qualify for reserve currency status. A final decision is expected to be made by the end of the year.
There are still reforms to be completed, but Eswar Prasad has written in the Financial Times that the Chinese are exerting the necessary leverage to get reluctant officials on board.
Prasad also argues that "the renminbi's rise could be a constructive force for change in China and the international monetary system." Such a move, Prasad contends, will further open up markets and make exchange more flexible and responsive.
But where is the U.S. in all this? Falling behind, it seems.
First, it missed the boat on the new Asian Infrastructure Investment Bank. The U.S. abstained from participation in AIIB while allies such as France, Germany, Italy and the U.K. jumped on board.
Second, unless he can right the ship, President Obama likely will miss out on the Trans-Pacific Partnership, which would stifle his moves to shift the U.S.'s focus to Asia.
The U.S. seems to be moving backward relative to the rest of the world, and The New York Times' David Brooks provides great insight on this trend.
Chinese leaders are pushing for their nation to become more capitalistic without disrupting their society or undermining their control over politics.
German Chancellor Angela Merkel and some other European leaders understand this, and that is why they are attempting to create a eurozone that is unified and competitive in global markets.
The U.S. has not had such challenges to its world leadership position in more than 60 years.
The concern is not that the U.S. has lost its world leadership position or will lose it in the near future. The concern is that the U.S. seems to be ignoring the reality that is right under its nose and, as a consequence, will suffer in the future.
China's expansion in the world is real. This expansion must be accepted and responded to.