|Economist warns against China bashing from Washington over trade|
BEIJING, Jan. 17 (Xinhua) -- The United States needs to face up to its own imbalances rather than engage in more China bashing over trade, said world-renowned economist Stephen Roach.
"The West, especially the United States, needs to take a long hard look in the mirror and face up to its own imbalances. Hypocrisy is not a recipe for global statesmanship," wrote Roach in Singapore's leading financial daily Business Times this week.
As U.S. congress and the White House look toward the mid-term elections of 2010, Washington could well up the ante on China bashing -- moving from a rhetorical assault to widespread trade sanctions, predicted Roach, chairman of Morgan Stanley Asia.
He noted that the United States has already imposed trade sanctions on Chinese exports of tyres, coated paper product and steel piping and grating in recent month.
Roach argued that the expected salvo from Washington was apparently built on hypocrisy as the United States itself should also be held accountable for the global economic imbalances.
Meaningful progress on global rebalancing could not occur without progress by both China and the United States and that China has a more optimistic prospect of achieving rebalancing, he said.
"There is good reason to believe that China ... is about to take dramatic steps in rebalancing its domestic economy in a fashion that would provide a sustained and meaningful reduction in its current account surplus."
China viewed the recent crisis and recession as an unmistakable wake-up call, which left the country with little choice other than to shift the sources of its GDP growth from external to internal markets, he said.
However, it was hard to be sanguine about the outlook for America's saving and current account imbalance.
"The United States, with its massive shortfall in domestic saving, has come to rely heavily on surplus saving from abroad to fund economic growth. And it must run massive current account deficits in order to attract that capital," he said.
All nations need to be accountable for the role they need to play in driving a long overdue global rebalancing, said Roach. "It would be the height of folly to try and force China into a counter-productive approach, especially since it appears to be taking its own rebalancing agenda very seriously."