
The Pettis Paradigm and the Second China Shock

economy. China is an investment-driven economy. The trade surplus is a residual result of investment-related policies that force up the savings rate to levels above the investment rate.
Michael Pettis • The Great Rebalancing

That is why it is probably better for policymakers to target trade surpluses rather than just the currency, or just interest rates, or just wages, or just taxes, or just direct subsidies, or just any of a dozen factors.