Size matters. If we look only at China's average level of development, we see a country with much the same standard of living as Thailand. If we look only at China's size, we see the world's second largest economy, biggest exporter (if members of the European Union are treated as separate economies), second largest importer and holder of the largest foreign currency reserves.

China's leaders are, naturally and rightly, focused on sustaining stability and achieving prosperity. The rest of the world is, no less naturally and rightly, wondering how China will exercise its growing power and responsibility.

So far, despite the difficulties, the adjustment to China's rise has been remarkably successful, particularly if one considers the gulf in culture, history and political systems between China and incumbent powers. The Chinese economy has proved outstandingly dynamic and increasingly market-driven. The West, in turn, has accommodated itself to China's rise. That was the wise thing to do.

Contrast, for example, the devastating impact of US protectionism and the Great Depression of the interwar years with the increasingly open Chinese economy of the last three decades and the successful response of "Chinese Keynesianism" to the challenges of the recent "great recession". Consider, too, China's entry into the World Trade Organization and the world's impressive ability to adjust to the rapid rise in China's trade from just 4 percent of the world's total a decade ago to 10 percent today.

China, then, and the West both have much to be proud of. Yet that does not mean everything has gone smoothly. On the contrary, both sides have made sizable mistakes in managing their economic interactions over the past decade.

China, for example, allowed an extraordinary surge in exports and the current account surplus to mask the development of an increasingly unbalanced domestic economy. Chinese household consumption collapsed from an already very low share of 46 percent of GDP in 2000 to a mere 35 percent in 2008, while gross fixed capital formation jumped from 34 percent in 2000 to 41 percent in 2008 and 45 percent in 2009.

Partly as a result of its decision to suppress the appreciation of the exchange rate, China emerged as the world's largest surplus country, with a current account surplus peaking at more than 10 percent of GDP and foreign currency reserves of close to 50 percent of GDP. These investments were unwise, made as a result of inadequate policies. Hence, China should not complain about its consequent (and unnecessary) vulnerability to the United States' fiscal policy.

The US and a number of other Western countries allowed the supply of cheap foreign savings, partly from China, to help stimulate a huge surge in household debt, consumption, residential construction and financial sector leverage. While the excess savings of the emerging world were not the principal cause of the financial crisis, they were surely a contributory factor.