Import commodities & Export inflation

1)In 1970, OPEC gave an unexpected blow to the U.S. economy by hiking oil prices. And in 2004, China was exerting a direct influence on American economic life. Global prices of commodities like oil, copper, steel, coal, cement and aluminium were rising sharply to the extent of 60-100%. 

2) China was pumping inflationary and deflationary price on the U.S. economy.

i.e. China's booming economy appeared to be pushing up prices for the global commodities while at the same time pushing down prices for goods via low cost exports. 

3) China's consumption expenditure was just 45% of GDP, a low proportion when judged by the standards of US, Europe or Japan, where it was 60-70% of GDP. 

4) Chinese economy needed a growth rate  of at least 7% to generate enough jobs to absorb surplus labour rural labour and the workers laid off by state owned enterprises.

5) Chinese were against currency pegging, as it might hamper the country's successful exporters. 

6) Slowing Chinese economy will affect developing and developed countries differently. While fast growth of developing economies was fuelled by demand for commodities from China. The developed economies are at risk of deflation as they were net importers of Chinese products. So if the Chinese firms start dumping their excess output on the global market (like steel), deflation could wreck the global economy.