When filing 1098-t form my scholarships and grants are higher than my tuition and expenses. So it is taking money from my return. Is this something I am required to file?

Yes.  If your grants and scholarships (not loans) are more than tuition, the difference (amounts for room and board or living expenses) is taxable income. You owe income tax on that amount so it will reduce your refund from other wages and withholding or you may even owe.  The IRS will send you a letter and a bill for back due taxes, interest and penalties if you don't report the income and pay the correct tax.

Thank you!

I also have an excess scholarship of about $1500. But can I use US-China treaty article 20 for this part and enter it as a negative number in line 21 (other income) of form 1040?   no matter I claim this tax treaty in line 21 or not, my taxable income is always 0. In this case, does it matter to enter the nagative number in line 21 or not?