China Bashing: "If you remember the 1960s, you weren’t there.”

Morgan Stanley's Stephen Roach blasts Washington's campaign against China:

"In fact, it’s at this point in the political process that the blame game kicks in and China enters the equation. Unwilling to accept any responsibility for its role in causing an unprecedented shortfall in national saving, politicians are reacting to America’s massive trade deficit and related job losses as if they’ve appeared out of thin air. Congress has used the trade gap as a foil to justify rising protectionist sentiment -- especially China bashing."

"On the surface, there appears to be good reason for that. After all, China accounts for the largest portion of the overall US trade deficit -- some $103 billion in 2002 and probably in excess of $120 billion in 2003. But there’s one critical flaw in this approach: China is the means by which America finances its saving-short economy -- it is not the reason why we have a trade deficit. And, by the way, as long as a saving-short US is forced to run a trade deficit, getting low-cost, high-quality goods from China is certainly in America’s best interest.."