Why the world needs China to save more, not less

The G7 economists’ memo from March and the IMF’s April report on global imbalances arrived at the same prescription: China’s current account surplus is excessive and should be cut by boosting consumption. The diagnosis is wrong. The world economy, especially emerging markets and developing economies, benefits from China’s high saving. A current account surplus is the excess of national saving over domestic investment. The saving is not lost; it is exported abroad in the form of net capital...

By Jeffrey D. Sachs