Dana H.

Roubini's Forecasts for Asia Recovery Are Flawed

Actually, an inability to encourage the destruction of savings (which is what people mean when they speak of "encouraging domestic consumption") would be bullish for China. The Keynesian notion that a country increases its wealth by consumption, or that you can spend your way out of a recession, reverses cause and effect.

It is savings and investment, not spending and consumption, that is the engine of a country's growth. So the irony might be that the entrenched defenders of the status quo will save the "reformers" from themselves. (Of course, I am exaggerating here, as I'm sure there are numerous restrictions and regulations in China that *should* be removed in order to encourage prosperity. I am speaking here only of the issue of savings versus consumption.)