The Importance of Orderly Adjustment in China

The key question really here is how China goes through the adjustment process. An orderly adjustment in China would probably result in a contraction of China's current account surplus, which would be an increase in net demand for the rest of the world. If Beijing postponed the adjustment because of domestic political opposition among the elite to a change in the growth model, then I worry that we'll get a very rapid, ugly and disorderly adjustment in investment. The flag is very important that U.S., Europe, Japan accommodate as much as possible the adjustment process in China.