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China is definitely part of the global imbalance. It is running a current account surplus in excess of 10 per cent of gross domestic product and it is accumulating reserves as if they were as profitable as a Madoff investment was supposed to be. Were it not for this fact, its currency would have appreciated much more than it has. So Tim Geithner, the US Treasury secretary designate, may have grounds to call China a currency manipulator. But depending on how China deals with its problems, it may worsen the global crisis or be a very important piece of the global recovery, while doing good for its citizens. What track it ends up taking is a big question looming on the global economy.


Hausmann, Ricardo. "No Time to Pick a Fight with China." Financial Times, January 26, 2009.