The discussion in last week's column concluded that there is a strong case for the Chinese government to absorb the surplus savings domestically, in the interests of the Chinese people. But the discussion here concludes that they can prevent such an adjustment for a very long time if they wish to do so.

So the authorities have a choice. What then should it be? If they should decide to reduce the current account surplus, should they allow faster appreciation of the nominal exchange rate or overheating and faster inflation? And how should they choose to expand demand? These will be the subjects of next week's final column in this series.