I see what you’re talking about in terms of advancing China’s independence. That was the point of the Great Leap Forward, etc. The problem has come about because the current leaders now seem to think the means (export economy) is the end. They still don’t see that they had to change the model at some point. They are still trying to promote the same export model now with various subsidies and currency manipulation. As Hugh Hendry pointed out in the interview linked last week, the USD/Yuan exchange rate rose just before the crash last year and has remained practucally glued at the same level since, unlike every other major currency.
Michael Pettis writes extensively from Bejing about the Chinese economy. http://mpettis.com/

Francois T: I’m not saying give our government a pass. I think I mentioned that at the beginning of my dissertation. What I am saying is that it takes two to tango when it comes to huge surpluses that occur voluntarily, as opposed to colonial systems.

Most growth across the entire planet over the last decade was built on a debt bubble. There is no way you can completely detach China’s growth from this fact. We deflate, they deflate. They are not going to be able to increase internal consumption enough, at a fast enough pace, to offset the decrease in exports that is coming.

Lastly – Barry, why on Earth are you quoting Chinese officials in the first place? You hold no punches when it comes to accusing (quite rightly) our own officials with obfuscation of the truth – somehow information and statistics coming out of a communist totalitarian government is treated as valid? Please.

And that is the approach of Keynes — it is mostly centred on utilization of existing capacity rather than growing the capacity itself.

Even if Keynes wrote quite a lot about the issue of capacity, or capital development, most famously that it is driven by “animal spirits”.

BOTH are true. savings -> … -> consumption is the long term foundation that creates capacity; consumption -> … -> savings is what happens in the short term and for a given capacity determines its utilization.

Yes, the Chinese contributed to the imbalance but can the Americans blame them? No, because each country should be defending its own interest and always expect that another country could to turn on them.

China will do what China thinks is good for China , not what the US thinks is good for China.

And Americans who blame Chinese are complete idiots because that means they actually believe that nations will do what is good for trade before doing what is good for their leaders or their own country.

China will do what China thinks is good for China , not waht The US thinks is good for China.

And Americans who blame Chinese are complete idiots because that means they actually believed that all nations wold do what is good for trade before doing what is good for their leaders or their nation.

It was the actions of Investment Bankers, both directly and through governmental influence. Very smart people with self-centered ambitions.