It is very excellent!

In terms of the letter responding to the article. I want to add some opposing points. 1/ https://www.ft.com/content/898...

China's saving glut can be caused by various reasons. High income inequality matters in this process. The rich take the majority of the wealth in the economy, Their savings (i.e. future investment) also reinforce the trend (wealth concentration) 2/

Why China's income inequality is so dramatic? It is an institutional problem. First, a lot of resources are the wealth of the state. SoEs are in a hard-budget constraint, which makes the capital very deficient. 3/

Also, the lack of transparency forms a lot of embezzlements. (especially in the infrastructure sector) This makes the money transferred to the people with powers. 4/

And, the weaker RMB makes the products cheap in the international market, so it doesn't require a quality deepening. (expensive products entails better quality and innovations) This forces the downward spiral of prices (price war model). 5/

The labor can be suffered in the price war model. Their boss will repress their wages (the same unit of work can be paid less). When the firm succeeds, the boss takes a lot, while the workers are poor. 6/

Also, when the cheap products are prevailing in the global market, it can dent the foreign industry with the ultra-low price. The dollars earned will be invested back into the American market. The dollar is strong, while high-tech cannot be aligned with the strong currency. 7/

Then, manufacturing suffered in the US, trade war begins. Trump got elected. China's high savings can also be caused by weak social safety net and the inertia of the norm to be thrift. 8/

Now, if the US deficit can go down, it means the China's surplus can only go down, too. Structural reform is inevitable under the context already. Or, the imbalances of trade won't abate, trade war can happen again 9/

Predistribution is a great concept now! It is actually a structural reform! Let's step onto the highways of development by do it in a smarter way. I once linked several pieces about it and redistributions. https://x.com/NiHao20010424/st... 10/10