By Li Hong, People's Daily Online

China and the United States, two of the leading economies that many in the world pin hope on to eject them out of a worst recession in nearly a century, now seem positioned in varied trajectories to draw their roadmaps for the 2010 economic planning.

For China, the edge of the fight is shifting towards combating possible asset bubbles and expectations of rising inflationary pressure, after policy-makers and economists in the country determine China is now in firm ground to usher in a more robust recovery next year.

For the United States, still troubled by a double-digit unemployment rate and a sobering projection the world's largest economy is going to contract by at least 0.5 percent this year, Fed officials and the White House remain in the rough seas, vowing to continue its easy credit policy, if not coming out with a second stimulus plan.

Stock markets have responded to the two differing policy trends. The New York stock market has gained more than 600 points since September and the Dow Jones has well surpassed 10,000 points, as investors are encouraged by the Fed's promise to extend its super-low rates policy for a fairly long period.

However, China's Shanghai and Shenzhen stock markets tumbled on November 24 after the central bank warned the commercial banks to rein in their lending, following officials' alarming cries asking for prudence and precaution to preventing bubbles from enlarging and inflation from building up. Sentiment across Asia, Europe and America was dented by the warning as investors dumped shares on concern that diminishing bank liquidity in China, a major engine of growth after a crippling global recession. China's major stock indexes dived 3.5 percent, or more than 115 points, marking its biggest retreat in 100 days as investors fretted about the warning.

Pundits say that the central bank warning comes ahead of Beijing's annual economic planning meeting in December and might foretell more government measures to reduce liquidity in the months ahead. These people believe excessively easy credit and proactive government fiscal policy have fired up the economy, leading to over-investment and over-spending across the board. Some even estimate that China's 2010 inflation could surge to 4 per cent or even higher.

So, China's easy credit and fiscal policy is set to be reined in. Some even suggest the central bank use public market measures to suck up liquidity, and raise the benchmark interest rates in mid 2010.

Obviously, the United States won't haste to toe China's heels, any time soon. Faced with high joblessness, slow income growth, ailing commercial real estate sector and still-hard-to-get credit in the market, American consumers and businesses remain weary to invest and spend. As economists believe U.S. unemployment rate will stay elevated and it would take up to five years for the economy and the labor market to become consistently healthy. Therefore, the Federal Reserve won't rush to tighten its belt and stifle a nascent recovery.

Although the Feds also believe that a record-low interest rates policy could lead to excessive risk-taking in financial markets, they gauge the risks of equity bubbles cannot outweigh the risks of a double-dip in its economy. The Feds has ruled that its super low rates policy will "stay for an extended period". And, economists including Nobel Prize laureate Paul Krugman even asked President Obama to mete out a second stimulus plan to augment recovery and create urgently-needed jobs.

Driving the wheels at sharply different lanes, policy-makers in China and the United States need more and better communication and coordination in order to avoid a collision course. Liu Mingkang, China's banking industry top regulator, has claimed the Feds' maintaining low rates poses a threat to global financial stability and further fuel speculative investments into other countries' equity markets, including China's.

However, except for sticking to an easy monetary policy, and printing more greenback papers to meet mounting demands at home and abroad, the United States can hardly resolve two of its central ailments it now faces: low growth and high debt. Perhaps, a weaker U.S. dollar might help it ship more exports abroad, too, which gains it both trade proceeds and crucial jobs.