Global current account imbalances between the U.S. and China have been a concern. A study looked at how rebalancing demand in China could affect these imbalances. By using a specific economic model, they found that if China reduces its current account surplus and strengthens its currency, the U.S. current account deficit would decrease. However, increasing the U.S. national savings rate would have a bigger impact on reducing the deficit. This shows that actions taken by both surplus and deficit countries can help reduce global imbalances.