America & the world: the challenges ahead: as we head toward a new decade, president Obama and the nation face a wide range of challenges around the globe.

• Author: Smith, Patricia
• Position: Cover story

CHINA

How the United States and China work together, compete economically, and use their diplomatic and military influence around the world will all play a critical role in shaping the most important international relationship of the 21st century.

China is now America's second-largest trading partner (after Canada), and its exports fill American store shelves; about 80 percent of the goods sold at Wal-Mart are made in China. But many Americans believe China doesn't play by the rules when it comes to trade, and they fear that thousands more U.S. jobs will be lost to China, which has a huge, low-wage workforce. Such fears put pressure on Washington to at least consider protectionist measures.

As China becomes a more powerful global player it's expected to overtake Japan this year and become the world's second-largest economy, after the U.S.--the U.S. will also need Beijing's help in dealing with nuclear threats in North Korea and Iran. (See p. 22.)

The U.S.-China relationship is complicated by tensions over Tibet, Taiwan, human rights, China's rigid controls on the Internet and free speech, and China's role as the chief financier of U.S. debt. When President Obama visited in November, his remarks on one of the key issues, free speech, created a stir.

"I have a lot of critics in the United States who can say all kinds of things about me," he said. "I actually think that that makes our democracy stronger, and it makes me a better leader because it forces me to hear opinions that I don't want to hear."

Climate change, also known as global warming, is one of the most complicated and controversial problems facing the world today. Agreeing on a treaty to address the problem was the goal of last month's meeting of 200 nations in Copenhagen.

Most scientists say that failure to curb the greenhouse gases that are warming the planet will at some point have disastrous consequences. For example, melting arctic and antarctic ice sheets could raise sea levels and lead to widespread coastal flooding. Melting glaciers, especially in the Himalayas, could jeopardize water supplies for billions of people in Asia. But the enormous amount of money required to address these issues, the impact of any greenhouse gas restrictions on an already-shaky world economy, and disagreement over which measures make the most sense is making it even harder to take action.

The U.S. is currently the second-largest emitter of greenhouse gases, after China. The Obama administration has been pushing a cap-and-trade system to limit greenhouse gas emissions (see p. 9), but so far the measure is stalled in the Senate.

AFGHANISTAN & IRAQ

As the U.S. winds down its military presence in Iraq, it is ramping up its involvement in Afghanistan.

Last June, U.S. forces withdrew from Iraqi cities, and President Obama has said the U.S. will withdraw its combat forces--most of the 115,000 troops currently there by August, and all remaining troops by December 2011. Since the U.S.-led coalition invaded Iraq and ousted Saddam Hussein in 2003, more than 4,300 U.S. troops have been killed in Iraq, thousands more have been injured, and tens of thousands of Iraqi civilians have died.

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Violence in Iraq, including U.S. casualties, has significantly declined since former President Bush sent an additional 20,000 troops to Iraq--the surge--in early 2007.

But the situation in Afghanistan, where the U.S. and its allies have been fighting since 2001, has been deteriorating. President Obama announced plans in December to send another 30,000 U.S. troops to join the 68,000 already there.

Obama has long maintained that Afghanistan, where A1 Qaeda planned the 9/11 attacks...