... putting the global economy onto a more sustainable path will require dealing with the imbalances between China and the United States. In the broadest terms, this will mean that Americans must consume less and that Chinese must consume more. Full Story »
Posted by Kaizar Campwala
This in-depth look at the US - China economic relationship is successful from several angles. It does a great job of explaining the economic dynamics in a way non-experts can understand. It also gives the reader an insight into Treasury Secretary Geithner, and Obama's China policy. What it lacks is a breadth of perspectives.
China came to depend on the income from selling those goods. Chinese leaders didn’t set out with a grand plan to create an enormous trade gap, Lardy argues, but each step along the way seemed to make sense. “I think they genuinely fell into this,” he says. The authoritarian government could stifle dissent with jobs. Local party leaders were rewarded for presiding over economic growth, and exports were the easiest way to achieve it. Once the export sector was built up, the cost of allowing the renminbi to appreciate was enormous.
