At least one of China’s economic imbalances is narrowing

Many Americans are fat undereducated idiots who are consumed by anti-China bias and fear towards China.

Only one of us is correct in our claims...

China’s trade surplus ($155.1 b in 2011) is relatively small as compared to its trade volume of $3,642 b in 2011, a mere 4.26% of its foreign trade total. This is perfectly normal for a nation's foreign trading.

Come to think of it, China now contributes 14.45% of world's total industrial output with about 19% of population. As such China is still an underachiever in the world of economy. Who says having trade surplus is not a form of competitiveness?

IMO, China should try to be more competitive and therefore to garner more trade surplus in the process, albeit seeking trade surplus is not the goal of Chinese policy according to news accounts.

The main reason of having big surplus wrt America is due to the US sanction against exporting high tech products to China. China is already the largest importer of American farm products in the world.

On Vice President Mr. Xi’s current visit to the US, his entourage of hundreds of businessmen from some 300 Chinese companies accompanying his trip have signed up orders of about $28 b worth of goods from the US companies on this trip. I have no idea of purchase details, but just how much “potato chips” can they buy? I suppose they need computers, machines and instruments instead, the stuff Americans are good at and competitive for.

With due respect, the protectionist acts of the US Senate are at best not helping, or worse,bullying.

Someone remind me how a fixed exchange rate (let's pretend RMB isn't actually going up) affect trade imbalance? How Is Germany responsible for its trade imbalance with Greece? How is California responsible for its trade imbalance with smaller states?

It was if I recall the US who rejected the idea of limiting how much surplus a country can have, back when it was the one doing the exporting?

That's not what the article is about:

"Even official figures, however, suggest that China’s consumption ratio stopped falling last year, at least if government consumption is included."

So no, private consumption is not falling. Private consumption has been continuously growing but from 2001 to 2010 it was growing more slowly than the economy. That is no longer the case. It notes "even official" because the government does not count many transactions as consumption which probably should be counted (nor does it count China's vast black market).

It really sounds like you're paranoid about the rise of China to totally misinterpret an article and assume China must be preparing for war.

If China allows its currency to appreciate, this would allow Chinese investors to accumulate dollar-priced assets, investments, businesses at a much greater rate.

It will also allow for Chinese consumers to compete with global consumers for scarce resources (oil, metals) on a more equal footing.

Now, who will be the first to complain when Chinese purchasing power rises?

While the Americans conceal less of that, but start wars all the time.

Actually China's government is probably less corrupt (in aggregate) than the one run by Ms Fernández.

Also China bullies its neighbors because it's the world's second largest power. America does far more of it as the world's largest power. If Argentina became a superpower then it would bully people too.

Also FYI, China will allow its currency to appreciate because it wants to improve the purchasing power of its domestic consumers and to make its economy more balanced and sustainable.

Now I work in China, have extensive family in Greater China, and I'm generally pro-China, but judging from your posts you take pro-China bias to a ridiculous level. I bet you're racially discriminated against a lot in America...

Umm go read an economics textbook? You want me to explain why a free floating currency is the most efficient to you on TE message boards?

Well a free floating currency is theoretically the most efficient and will induce the most economic growth for a country in a free market.
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The US should not be calling for China to let the RMB appreciate faster, but instead eliminating the obstacles in the global free market in that allows an undervalued currency to actually outperform a free trading one. After these obstacles are removed, then China will naturally allow its currency to appreciate freely out of self-interest.

This incessant talking of under-valued RMB proves, to me at least, that it is impossible to explain a semi-complex problem (currency exchange rate is) to people with mediocre intelligence (a super-majority of people is).

Just try this gedanken experiment: imaging RMB is elevated by ten-fold, every RMB notes have one zero erased, every bank deposit shrinks by factor of ten, every price (in China), every salary (again, in China), etc, reduces by ten… Now, what will do to the trade imbalance?

If china changes its currency then we have to pay for the Freight, Storage, Labor , Insurance. You are asking for alot of trouble if you want that change.

Also I stated that both the US and China should pursue this free market, rather than playing a game of currency wars, which is something that most Chinese will agree with.

Stop being so defensive about your mother country.

Again, you didn't explain how a free floating currency is the most efficient other than relying on faith, nor explain where to find this "free market".
I'm sure China will let the currency appreciate if its possible for Beijing to completely buyout Lockheed Martin, until that day comes, there is no "free market" and the obstacle will always be there.

Did you understand the issue ?? It is about the dollar<-->renmimbi exchange rate, which is being kept fix by the Chinese government.
The Americans claim this RATIO is artificially low, in order to promote Chinese Exports. They also claim this destroys jobs in the US.

probably Im idiot but, whats the relevance of your asertions?end of conversation

sorry for them, I'm a litle overweight argentine, economist & probably idiot but, it s of litle relevance. The bujarinist government of china has not abandoned his totalitarian way of bulling their people and the rest of the world.

the chinese are concealing their military spending

The U.S.A has nothing to work for. SOLAR , WIND TURBINES, SPACE, what are we trying to build?

but the article is about the mistery of private consumption falling and surplus falling too. Where is the money? in government consumption, ergo, military secret spending