The Banque de France recently published an interesting article by the Governor of the People's Bank of China, Dr. Zhou Xiaochuan, in its Revue de la stabilité financière. The article discusses the causes of high Chinese savings, as well as provides some interesting insight on how to address the current global trade imbalances. It also presents an interesting view of US-China trade dynamics.
The point I found most interesting in the article was Dr Xiaochuan's refutation of the common claim which holds that the increase in US consumer credit was fueled by the high level of Chinese savings. According to the Governor, Chinese savings could not have caused US consumption to increase given that the high consumption in the US commenced in the mid-1990s whereas "the savings ratio of East Asian countries only surged after the Asian financial crisis and China’s savings ratios did not begin to increase until 2002" (p. 168). Dr. Xiaochuan's take on this matter is in line with the point I made here regarding the causes of the high household debt burden in the US.