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1, China will maximise its economic potential and bee a powerhouse within two to three decades.9 It faces enormous domestic problems.No one knows their seriousness better than China39。s own leaders. But in a pragmatic way, they have coped with their problems. This leadership is not in denial of the weaknesses and flaws in their system: among them, widespread corruption and increasing numbers of mass protests in rural areas where Communist Party officials collude with property developers to evict farmers from their land without adequate pensation. Beijing’s response has been flexible, using the carrot or stick, or both. It has survived traumas that would have cracked a rigid system. While there are imponderables in its development, the course it has set out on will result in high growth rates for the next two decades.High growth will bring major social and political changes. China’s present political structures will e under acute stress.Governing a people with over 70% living in urban areas with access to worldwide information through “Blackberries”, cellphones and the Internet will require a restructuring of their political structures and governance of this huge nation. 10 China’s transformation began when President Richard Nixon and Secretary of State Henry Kissinger visited Beijing in January 1972 to talk to a thenseemingly implacable enemy. They changed the course of history.Soon afterwards, China openly broke off from the Soviet Union. In December 1978, Deng Xiaoping announced his opendoor policy that is now restoring China to its former global status. Successive American Presidents have moved relations with China closer towards the centre of US policies.There was vacillation, sometimes China was called a ‘strategic partner’, at other times a ‘potential adversary’.But US policy kept a steady course to increase multilateral trade, investments and mutual prosperity.Furthermore, closer ties with other East Asian powers are enhancing security.11 Unlike USSoviet relations during the Cold War, there is no bitter, irreconcilable ideological conflict between the US and a China that has enthusiastically embraced the market. Both countries want stability in their relations and an international system that increases trade and investments.12 SinoUS relations are both cooperative and petitive.Competition between them is inevitable, but conflict is not. For China to grow its economy, it needs stability at home and peace abroad. It seeks access to the markets, investments and technology of all major economies. For instance, China has stopped resurrecting grievances over atrocities mitted by the Imperial Japanese Army in occupied China from 1931 to 1945. Instead, President Hu Jintao and Premier