How Berlin and Beijing tilted world trade [with ECA support]

(Other News, Rome, 4 February 2013) Michael Pettis argues in "The Great Rebalancing" that in a globalised economy everything connects with everything else. He notes that the US trade deficit is not generated mainly by Americans gorging on consumer products made by hardworking Chinese. It is also created by Beijing's sustained promotion of production and suppression of consumption, creating surpluses for export. This promotion includes record breaking financial support for Chinese investment, and while the table of contents and index do not mention ECAs, record levels of Chinese export finance must play a role in this dynamic. He also claims that Greek deficits are born not of the population’s imagined laziness, but result from Berlin’s policies to boost competitiveness to cut the job losses created by unification, noting that wages were held down, limiting domestic consumption and increasing the export of extra production, notably to the eurozone, where a favourable exchange rate benefited Germany.