The Bush administration's China position, by way of Jamie Galbraith:
So here's the Bernanke-Paulson position in brief summary:
1) China's currency strategy has helped produce rapid growth for 30 years; therefore it should be abandoned.
2) China's high savings rates have been a key to this success; therefore they should be reduced.
3) China, a country emerging from communism, should spend more on public health and social security, so that ordinary Chinese can save less. (This is actually a good point, as far as it goes.)
4) The United States, a capitalist country, should spend less on social security and public health, so that ordinary Americans will be forced to save more.
5) Somehow, all this will reduce the deficit in the US-China balance of trade, a goal whose importance everyone agrees on but that no one can actually explain.
