China’s self-reliance drive and its widening trade imbalance with Europe

The New York Times reports that China’s manufacturing push has widened its trade imbalance with Europe. Sharing the article, a commentator argues that exchange-rate adjustment is vital because growth in Chinese domestic demand no longer brings more imports from Europe and elsewhere. Without rising imports, the commentator says, balance requires slower export growth. They also quote the article’s point that falling prices in China mean trade measured by value understates the volume of Chinese goods entering Europe.