Pressure mounts to pressure China

As American officials prepare for the forthcoming trip to China to discuss the US-China economic relationship, Treasury Secretary Paulson faces pressure from the new Congress to get serious about the "China Problem." As the New York Times reports, "Leaders of Congress say that the pressure on Mr. Paulson to achieve something is acute, and that it is coming from both Democrats and Republicans. Representative Nancy Pelosi, the California Democrat who is to serve as Speaker of the House next year, has already signaled a tougher line on China, raising the stakes for the Treasury chief. “Many of us in the Congress will be watching closely for tangible results from Secretary Paulson’s trip,” Ms. Pelosi said through a spokesman, asserting that the administration’s policies on China have generally been ineffective across the board."

It seems appropriate, therefore, to look at the debate about the cause of the global imbalance.

The World Bank Poverty and Growth Blog's concise overview of the most popular explanations.
The 2006 Economic Report of the President on the U.S. capital account surplus (Chapter 6).
A 2006 Treasury Department paper.
Finally, you can read Ben Bernanke's take on the global savings glut.