A clear warning about the true health of the US economy and the state of US-Chinese economic relations has been issued by Larry Summers, President Obama's leading economic adviser.
Speaking at the World Economic Forum in Davos, Mr Summers was cautious on last week's apparently strong US growth figures. "What we are seeing is a statistical recovery and a human recession," he said. "My judgment ... will be that GDP growth will continue at a moderate rate at least for the next several quarters. What is disturbing is the level of unemployment. This is not just a cyclical phenomenon but also a structural phenomenon."
A key issue in addressing what some are calling the "jobless recovery" in the West would be to fix the imbalance between the great creditor and debtor nations – chiefly the US-China trade relationship. Mr Summers – sharing a panel with the deputy governor of China's central Bank, Zhu Min – said: "Not everyone can have export-led growth. Countries that traditionally have export-led growth desire to continue the growth; countries that have been substantial borrowers want to reduce that borrowing. There's a mismatch; it's serious."
Mr Zhu replied: "We want to increase consumption but it will take some time. We need global coordination on structural change ... for us to increase consumption and for others to increase consumption or to increase savings."