An economic shift in the desired direction

The global economic downturn has called into question the conventional wisdom on financial deregulation and innovation. This same conventional wisdom, embraced so lovingly by China-bashers in the West, has been used to criticize Chinese exports and economy.

Western critics have long argued that China's rapid economic growth has been fueled mainly by rising exports of cheap goods. They allege that these exports undercut prices of North American and European products, causing the loss of large numbers of high-paying jobs in the manufacturing sector. In the US, China is seen as boosting its exports unfairly by keeping the yuan undervalued against the dollar.

Such complaints always ignore how Western consumers have benefited from cheap Chinese goods. And now they seem to have overstated the importance of Chinese exports, too.