The fact is that as long as China cannot raise its consumption growth rate, it must either boost debt and unnecessary investment, or it must run large surpluses with the world. And as long as China directly and indirectly continues to acquire US assets to pay for surpluses with the rest of the world, then the US must continue to run the corresponding deficits and must continue to shift domestic production away from manufacturing and into services. Export restraints and other targeted measures by China to restrict specific exports or to encourage specific imports will just shift trade around, but it won't change the underlying imbalances and it won't slow US deindustrialization. The only meaningful ways to change the underlying trade imbalances is for China to voluntarily cut back on excess production, for the US to engineer a domestic recession, or for the US to change its role as absorber of last resort of global saving imbalances. For the last to happen, we would probably need either a new global trade agreement, a much weaker dollar, simple, uniform tariffs on all imports, or restrictions on foreign capital inflows. To solve a systemic problem, you need a systemic solution, not incremental changes.
