US economic remedy questioned

Chinese scholars expressed pessimism over the outcome of the first round of the China-US Strategic and Economic Dialogues, which kicked off yesterday in Washington, DC, noting that the US is requesting that China change its mode of development without realizing that the US is the epicenter of the global financial turmoil.

Mei Xinyu, of the Chinese Academy of International Trade and Economic Cooperation, agreed that China and the US should discuss a reform of economic structure, but he also noted that it is more important for the US, a country that is at the epicenter of the global financial turmoil, to undergo reform, as "prescriptions for China do not cure the illness of the US."

"Demand creates corresponding supply, not vice versa." Mei said. "The hike of China's export volume is a result of the rising demands in Europe and North America. To merely request that China change its mode of development does not address the real problem."

The massive US trade deficit with China, Washington's second-largest trading partner, swelled to an all-time high of $266.3 billion in 2008 and keeps growing, but the US has warned that there is going to be less of a consumption-led recovery as US households save more money.

Tian Yun, vice president of the China Macro Economics Institute, said that it takes a long time for both countries to adjust their economic structures, which had been highly complementary to each other before the financial crisis.

Source: http://world.globaltimes.cn/americas/2009-07/451665.html