China's investment boom is unsustainable?
China's investment-driven growth is certainly inefficient, and it is true that the technocrats in Beijing are far better at “solving” problems by throwing cash at them than by making tougher structural changes.
But the idea that building more roads and houses is a waste of money is, to put it bluntly, bunk. The scale of the urbanisation process in China is so huge that plenty more investment is needed, even if the numbers look “unsustainable” on Wall Street.
Many small cities across China's vast interior are still waiting for improved rail and road connections, while a paucity of decent low-end housing is a growing social problem nationwide.
China still needs plenty of roads, bridges and, above all, houses – which is exactly why the country's long-term investment boom is not about to go pop.