Dwight H. Perkins, Harvard University: Professor Yu has made a number of points relevant to the questions of the U.S. trade deficit with China and whether or not China is a market economy and eligible for market economy status in its trade with the United States. My comments focus on additional issues that need to be considered in analyzing these two questions.
First, to fully understand why the United States has a trade deficit with China and China a surplus, it is important to understand the macroeconomic considerations that underlie this result. The United States has an overall trade deficit with the rest of the world and China has an overall surplus. This overall deficit results from the fact that the United States consumes and invests more than it produces. This is due in part to a low saving rate and an investment rate that is considerably larger than that...