Throughout 2010, China was criticized by the United States Congress (and many others) for "manipulating" its currency in order to maintain an advantage for exports, and thus preserve its trade surplus.
Measured by the percentage of people living in its cities, China's urbanization rate currently stands at about 48%.
Not long after the US Federal Reserve Board announced its second round of "quantitative easing", the People's Bank of China announced two increases of 0.5 percentage points in the required reserve ratio of bank deposits.
A major new target in the "Five-Year Plan for Economic and Social Development" that China just unveiled is to boost the growth rate for household (disposable) income so that it equals the growth rate of the country's GDP.
Reports about labor shortages, wage disputes, and wage increases for migrant workers in China have abounded of late. They naturally raised concerns, or expectations, that China's labor-cost advantages may be disappearing.
While parts of the world are dealing with the aftermath of the financial crisis or an emerging sovereign-debt crisis, China is coping with the risk of overheating and/or an asset bubble.
What China has been doing seems to me to be the creation of a true "Keynesian world": more private business and freer price competition at the micro level, and active countercyclical policy intervention at the macro level.
China should use its current high savings to build up the country's infrastructure and speed up urbanization, thereby laying a firmer foundation for future development. Savings could remain high while the trade balance would be held in check.
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