Overly invested in a Chinese fantasy

Conventional wisdom says China has near-infinite scope for growth-promoting investment. In reality, it seems the country has long ago passed the point where investment in the aggregate is wealth creating.

I have been arguing for several years that once China begins the adjustment process, which I expect to characterize the ten-year period of the current administration, growth rates must slow significantly. My expectation for long-term growth is that it shouldn’t average much above 3-4 per cent annually. This is what it will take for household consumption to rise to roughly 50 per cent of GDP in a decade if consumption growth can be maintained at its historic rates of around 8 per cent.


SMS Code Sent…

Hi {{ user.FirstName }}

Looks like you've already taken a free trial

We have sent you a code via SMS to {{user.DayPhone}}

please enter this code below to activate your membership

If you didn't receive SMS code please

Looks you are already a member. Please enter your password to proceed

Verify your mobile number to unlock a FREE trial

Please sign up for full access

Updating information

Please wait ...

Related Articles