Comments on Nicholas Lardy “China’s rebalancing will not be automatic”, 22/02/2012, http://www.eastasiaforum.org/2012/02/22/china-s-rebalancing-will-not-be-automatic/
While I am highly likely to be in no position to analyse the various data and/or studies to support different and often opposing argument, I wish to make a point on perhaps one small aspect explicit or probably more implicitly in Lardy's post, on a logic or reasoning basis.
It seems to me that Lardy's implicit underlying logic foundation is on "equilibrium level" or "purity" in terms of balance and imbalance. In another word, if it is not in the balance at the equilibrium level, it poses a problem. Fundamentally, it relies on equilibrium and statics.
That kind of logic can be contrasted with a change concept, that is, a gradual improvement or moving towards something, say equilibrium.
In physics or mechanics terms, he emphasises much more on the level of "speed", and much less so on the change in speed or "acceleration".
There is no need for me to say too much more on this, given that most readers would be familiar with these concepts and the relationship between speed and acceleration.
So in my view he is both correct and incorrect, depending how one looks at the issue.
Having said that, I seem to remember that Lardy is an accomplished US scholar on the Chinese economy and my comments is by no means to discount his contributions in this area.