Two conditions for global growth to remain durably high

For global growth to remain high: The United States would have to eliminate its external deficit. At present, the US trade deficit means that capital is flowing from the rest of the world to the United States, which weakens global growth because per capita capital is higher in the United States than in the rest of the world; China would have to allow its excess savings to be lent to other countries. At present, China’s excess savings are invested in China, due to the controls on capital outflows, and are financing inefficient investment in China, for example in construction. To sustain global growth into the long term, the United States and China are therefore going to have to stop impairing the efficiency of global savings.