“The crisis originated from Wall Street and many indisputable facts have established that micro factors had played an overwhelmingly important role in causing this crisis. People outside China need a better insight into the high savings rate in China.”
-Chinese central bank governor Zhou Xiaochuan
Gee, why do you think they would be upset about hare-brained rationales that duck blame for the crisis?
Bernanke’s 2005 global savings glut nonsense was an ill-conceived attempt to shift responsibility for U.S. policy mistakes to Asia. Of course, China’s trade surpluses had an impact on the global economy — but it can hardly be blamed for Easy Al’s ultra-low rates.
“Asian officials and scholars are pushing back against the notion that their countries’ high savings helped cause the financial crisis by flooding the world with money, arguing that lax U.S. financial regulation bears the brunt of the blame.
“Asians financed cheap consumption in the rest of the world, this is what they say. This is something I just cannot understand,” Supachai Panitchpakdi, the head of the United Nations Conference on Trade and Development, and a former Thai government official, told a conference Friday. “This is another theory we have to debunk. Asians have not been over-saving and under-consuming.”
The real difference between Asians and Americans, Mr. Supachai argued, is that American consumers borrowed heavily to finance their spending while those in Asian nations mostly didn’t. He said that consumption levels in Asia are “normal,” averaging about 40% of gross domestic product. He acknowledged that household consumption in China is relatively low, at 36% of GDP. But he said that’s because growth in investment and exports have been very strong, not because consumption has been weak.
To review: Much of the oast decades growth int he United States was fueled by credit, leverage, and borrowed money. The Asians growth has been powered by manufacturing, production and exports.
And we are lecturing them to spend more and save less — you know, behave like us — more irresponsibly.
WTF is THAT about? This is end of empire type stupidity . . .
Asian Officials Push Back Against Savings Glut Theory
WSJ, JULY 3, 2009, 11:42 A.M.