Mr. Khosla's discussion on the relationship between growth and the savings rate fits well into the China case. Before 1979, high savings rate did not lead to high growth but high waste (mainly state heavy industries). But in the past 15 years, the high savings rate is in step with high growth rate. The main reason is that non state sector, rural industry, has made it possible for China to have a relatively efficient allocation of savings. Kate
katezhou[atx]uhunix.uhcc.hawaii.edu