Unbalanced: The Codependency of America and China Hardcover – January 28, 2014

I am not an economist, but I have listened to Mr Roach whenever he makes a statement about China and Asian economicsI find his argument regarding the US-China trade situation compelling. The numbers do not lie. The US has(borrowed) and spent hundreds of billions on China trade and the Chinese have inturn purchased US Treasuries andmade FDI in the US economy. The average Chinese citizen makes about $10k US a year and they save 40 percentannually. The average US citizen earns about 3.5 times that and they save 1-2 percent!China is on a precipe, but so is the US. They have little safety-net to rely on (among other problems like excessive air pollution, belligerent foreign policies). And the US is on a course of higher debt and interest rates (and a insistent cry about currency manipulation).Hopefully, future crises can be avoid, but not until all recognize this trade/investment imbalance.

Roach is a strong expert of the policy in the modern age. The relation between China and Usa is complex, but it is a reallity. The commerce worked already with Greenspan and step-by-step this evolution become more stable, also if not often in a linear way. It happens in fact with certain difficulties and the knowledge of the trial-and--error. But just for this fact we can hope that the democracy can work also in the Asian countries.

In full disclosure, my wife and I had the privilege of meeting Mr. Roach last week. We had the great fortunate to be at an intimate book signing at a local library in Ct. That being said... This is offered to all readers as a great reminder of how the US/China codependency came to be and a warning of how it may end. I offer you a hint: read chapters 11 and 12, then pages 196 through 200, and repeat. I further by adding: memorize the SEI's on page 238.

A very important book helping to understand the unbalances of China and USAI find it interesting that American scholars and experts often find that the short-comings of USA to deal with its issues are larger than that of China and othercountries. The book explains why this is so. I find this an equally important bookas Republic Lost and The Bankers New Clothes. I would give it 5 stars

Without a doubt the best book on US-China relations, with a special focus and nuanced understanding of the economic ties. I took his class at Yale as well, and he was one of my favorite professors. Guy is legit. Book is a good shorthand for many of his major ideas.

Refreshing in its treatment of each country's economy and its dependence on the other. A must read for anyone interested in grasping the truth about dependence of US on China and vise versa.

I am only through the first chapter but absolutely loved it! Roach has a very fun and witty style of writing - not common with economists... I normally can't handle reading long simply as I cant sit still for long, but I went over the first 20 pages without even realizing it. Highly recommended!

the ideas are in this book are very inspiring and forward-looking. if you want to understand a real China, this will be a great book to read. it covered the history, as well as today and the future.

So I read this book for old times' sake.I've traded fixed income out of a good ten addresses, but not (yet??) Morgan Stanley. A decade ago, under Stephen Roach, they had the Street's undisputed #1 economics department. So my weekend would invariably start with the musings of Stephen Roach, Joachim Fels, Andy Xie and Robert Alan Feldman, with special attention given to avoiding anything Eric Chaney had to say, in case it inspired me to trade Sterling, where I have a solid record in losing money.I'm happy to report he has not changed much. Others have tried to write this book (example: Michael Pettis) and failed. Stephen Roach has one story and he lays it out over 250 pages. Twenty five would have probably done the trick, but hey, he's got spare time out in Asia where they parked him once his perma-bearish outlook had become too uncomfortable for management. And if I read this right, he seems to be totally gone now and working out of New Haven. Yikes!The story is not rocket science, but somebody had to write it: China has spent the last thirty years moving its population from the countryside to the megacities of the coast, where they assemble (but increasingly also design) consumer products that we buy in the West. It was a gamble and it's paid off, with China becoming the world's second largest economy, manufacturer and exporter. Perhaps even the largest on at least a couple of these measures. The model of the Chinese economy has become export-and-investment led, the two representing 72% of the economy (don't worry, imports bring the number back down somewhat), at the expense of the Chinese consumer, who's stuck at 36% of GDP and of the Chinese worker, who is having to look for work in the part of the economy (manufacturing) that is most open to advances in productivity.Conversely, the US has completely given up on investment, has totally unlearnt how to save (at the government, corporate and personal level), has run a budget deficit since the Reagan years (a couple years of surplus at the height of the Clinton / Greenspan tech bubble notwithstanding), a savings deficit since 2008 and a negative current account balance since (you guessed it) the Reagan years and has made consumption (at almost 70% of GDP) the cornerstone of its growth story (perhaps even the whole planet's, at 17% of its GDP), most recently fuelled by a good 2 trillion of Treasury purchases by the Chinese central bank.So the two states have become, in Stephen Roach's words, "codependent"The book is a story of* how we got here (It was an explicit and well executed strategy on the part of the Chinese, and a combination of 1. The politics of "growth addiction" and 2. Alan Greenspan's blind faith in markets on the part of the US)* why we need to stop blaming the Chinese for allegedly stealing American jobs when (i) America shares at least half the responsibility and (ii) the US has a current account deficit with 102 economies, of whom China merely happens to be the largest but by no means the naughtiest on WTO measures* how we can cause a 1930's style disaster if we unilaterally start a trade war* what comes next (rebalancing, whether we want it or not, since we've reached the end of the road for both the US model and the Chinese model with the crisis of 2008)* what specific measures both sides must take (the Chinese should promote labor-intensive services such as transport, retail, financial services etc., while the US must prepare to export such services to China, must cut its budget deficit, must give up on consumption that's never coming back because the middle class has either totally lost the assets that once drove its spending or is busy servicing the associated debt, must stop the Fed from further inflating assets because they belong to the class that does not spend anyway and must find ways to invest more, both in areas where it used to lead in, like education, healthcare and infrastructure, but also in growth areas of the future)No doubt there are some contradictions here. Either the US government must cut the deficit or it must invest. Either the citizens should spend or they should chase even further into the sky via their saving money the very assets the Fed has inflated with its sundry bubblicious activities. But Stephen Roach loves a moan, so it's up to you the reader to draw the line somewhere; he won't.And that, of course, is what we fanatics love about Steve Roach!

Great book and very topical in the current environment. Great read. fantastic journey in the Chinese US relationship

A must read to counter balance the lies being blurted out by txxxp. Though we must rethink supply chains. Fear, though is not policy to pursue.

This book is in a sense continuation of the earlier book The Next Asia. Reading them together provides rational argument and realistic assessment of relative strength and weakness of China and the US economy.Implication of Unbalanced economy will have domino effect on rest of the world heavily dependent on number one and two economies of the world. There Is No Option but to accept interdependence and co-prosper.