Is West Ready for China's Bubble to Pop?

The US and Europe have also pumped a lot of money into their economies. This will be a drag on growth. While the latter wind down their deficits and debts, devising a competitiveness strategy that involves China would be advisable. The strategy could focus on constructive work with Chinese authorities on product standards, notably environmental ones. It could also contribute to Chinese reforms to improve its investment climate and allow more Western investment in services (like banking, telecommunications, environmental services and higher education). A final issue such a strategy could address is getting rid of the kind of Western protectionism that targets China’s declining cheap-labour-intensive exports. This includes the vexing looser-than-average anti-dumping standards the EU currently applies to China because it does not recognise China as a market economy. According to WTO rules, this allows the EU to be more lax in its criteria to determine dumping.