Global leaders have agreed reducing global imbalances is a priority. In practice, that means reducing the US $500bn current account deficit and shrinking the $350bn surplus of China. All other current account imbalances pale by comparison.

Since a current account surplus is the difference between a nation’s savings and investment, that agreement means the US must raise its national saving to be less dependent on foreign funds. China must lift domestic spending to maintain high employment without producing so many exports.