Rebalancing the US-China Economic Relationship
As the global economy re-stabilizes, there is a growing danger that the US and China will slip back into their pre-crisis economic patterns, placing themselves and the rest of the world at risk. After all, it is human nature for complacency to set it, and the domestic politics of the US-China trade and financial relationship is deeply rooted.
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CAMBRIDGE – As the global economy stabilizes, there is a growing danger that the United States and China will slip back into their pre-crisis economic patterns, placing themselves and the rest of the world at risk. Despite Chinese official rhetoric about the need for a new global currency to replace the dollar, and US lawmakers’ flirtation with “Buy American” clauses (which scares everyone, not just the Chinese), no one will want to rock a boat that has almost capsized. So China continues to run a giant trade surplus, and the US continues to spend and borrow.