China will likely take proactive steps to slow down the flow of money through exports.

Question: Is China a bubble? 

Azim Premji: Irn think the Chinese government is realizing that the economy is rnoverheating. So, I think they will take proactive steps to slow it down.rn The last quarter I understand the growths are running at rates of 12% arn year GDP. And two, I think the Chinese government is seriously rnconsidering whether they should firm the Chinese currency because of rninternational pressure, but also because the economy is heating up too rnmuch in terms of flow through exports. 

Question: What rndoes the U.S. need to do to maintain its status as the leading economy? 

Azimrn Premji: One is very obviously, which every economist will tell you rnit’s got to fix its problem of the fiscal deficit. It’s getting out of rncontrol. Two, I think the American consumer must learn to live within rnhis or her means. You cannot have a society where you spend more than rnyou earn. I mean, it’s just fundamentally not viable in the long run. I rnthink the corrective steps which are taking place now should lead in thern right direction. 

I think one is that the American consumer is rnlearning to save. Right? The savings which were running negative now arern running between 4% and 5%. Insofar as the fiscal deficit is concerned, Irn think the President and his team are addressing issues which are rneconomic to see to it that they contain the fiscal deficit and the rnPresident is making tough decisions, which is why he is getting rnunpopular with some of the commercial leadership.