I am just wondering if there is perhaps a motive behind the excess commodities hoarding of not only speculative reasons but also to in the short term mask the trade imbalances between China and the rest of the world.

By substantially lowering their supposed trade surplus i guess that in a way will also help to dampen the trade disputes for now? Although if this is in fact a tactic i wonder how they are going to mask future trade balances since i am assuming there is not much more room in hoarding the commodities.

He would probably do a bit better if he argued in a consistent way too.

As to your second point, I would say that the education system here often discourages open debate and criticism (at least at a pre-university level – and mostly so even after that), and so people can react quite angrily / defensively when faced with any criticism – no matter how it is presented or how constructive it is. The same problem occurs with the media, here the vast majority of the media is positive, so when people look at foreign media (normally of course only looking for stories about China) and see so much negative news ( criticism which they normally fail to realise is aimed in all directions, not just at China), they can become quite angry at “western media” (whatever that is).

At least this blog is not attracting the “1 yuan” (or is it “5 mao”) bloggers yet, then things really get tedious.

“Michael Pettis argues that US debt levels will decline and: ‘as a result American consumption will grow substantially slower than the US economy, and so the trade deficit will decline.’ The two halves of this sentence do not follow from each other from the point of view of economics (therefore the word ‘so’ is not valid).”

Yes they do follow. I recognize this analysis isn’t part of standard economics modeling (not that this worries me), but the idea that growth in consumption is equal to growth in GDP plus or minus the change in debt comes from Steve Keen, an Australian economist and someone who I have been reading a lot of lately. He is a ferocious critic of the traditional static-model school of economics (his most famous book is Debunking Economics), but as a hard-core Minskyite he has a balance-sheet orientation towards growth – something very poorly understood by most economists – and it is perhaps not surprising that I find myself in sympathy with much of what he says. Rather than explain the relation between growth, consumption and debt, I recommend that you read his blog, which does a much better job than I could.

also why do so many people assume that either you praise all chinese government policies uncritically or else you hate china? i know that this is the official government line, but aren’t the people who read this blog smarter than that?

Your point about a rising savings rate in the US not necessarily leading to a declining trade deficit is technically correct, but only because OpEd pieces are required to be short. In my original draft I included a brief discussion, which I had to remove, presumably because it was too obvious to need saying, that investment in the US is declining, not rising. The US government is attempting to reverse this decline by its own fiscal spending, but very few people, including me, expect investment in the US to rise faster than savings over the next few years. It would be great if it did, but I suspect you are only insisting it must in order to score points. Weirdly enough, you then argue later that investment is falling in the US in order, once again, to score points. This is tedious at best.

This has become a pretty pointless debate because it isn’t progressing at all. We will see what happens next. I argue that over the next five years Chinese consumption growth will outpace Chinese GDP growth, and that this can occur either through a much more rapid increase in consumption (the good way) or through a slowdown in GDP growth (the bad way). You argue that Chinese savings will rise and Chinese consumption will decline. Fair enough. Let’s see.

1. China has no choice but to lend to the US as long as it expects to run a trade surplus with the US. This is true of every country. China cannot “decide” whether or not to do so in any meaningful way without either causing the trade deficit to shift elsewhere (e.g. to Europe, which would not accept it), or forcing a sharp contraction in its exports.
2. If the US wants China to lend a lot more money, all it has to do is force a significant increase in the US trade deficit. Since this would not be in the US interest, it turns out that the less China lends to the US, the better For the US (now do you see why I say my position is almost the opposite of what you claim?).

The selection you quoted argues something very different from what you think. It says that although it may be in the best narrow interest of the US to cut down its borrowing, and so contract its trade deficit more quickly, the impact on China would be very difficult, in which case the more the US slowed down its adjustment, the better for the world.