Contrary to G7 and IMF reports, economists argue that China's high savings and current account surplus benefit the global economy, particularly emerging markets. The surplus represents exported capital, not lost resources.

The G7 economists’ memo from March and the IMF’s April report on global imbalances arrived at the same prescription: China’s current account surplus is excessive and should be cut by boosting consumption. The diagnosis is wrong. The world economy, especially emerging markets and developing economies, benefits from China’s high saving. A current account surplus is the excess of national saving over domestic investment. The saving is not lost; it is exported abroad in the form of net capital...