I found your commentaries on Buffett’s Import Certificates to be very interesting. I will be discussing both of them in an upcoming entry on my blog.

I’d like to try to answer the two questions that you posed:

1. What do I think about the China Super-Cycle? Is it sustainable?

No. It is not sustainable. China was only importing 25 cents from the United States for every $1 it exported to us (2008 statistics). As a result, the American consumer had to borrow to buy Chinese products, without getting income from selling to China. In a nutshell, that is the cause of the current global recession.

2. Where will the growth come from?

Eventually, new technologies will drive growth, but in the next several years, I don’t see any growth in the United States unless we adopt Buffett’s Import Certificates Plan.

Overall Comments:

Buffett’s plan would increase American exports while decreasing American imports. It would force the Chinese government to take down its barriers to American exports.

The main result would be that the United States would start getting fixed investment in new production, not just from American companies, but also from foreign companies who would choose to build new factories in the United States.

Under Buffett’s plan, the United States and China would both get growing income from trade and would grow together.