Michael Pettis on China's overinvestment paradox, and the Japan-style reckoning still to come - Top1000funds.com
Michael Pettis on China's overinvestment paradox, and the Japan-style reckoning still to come - Top1000funds.com
Source: Top1000funds.com
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DW NOTE
China runs investment above 40% of GDP while consumption lingers below 40%. That gap doesn't close through rebalancing — it closes through crisis. Japan took fifteen years of stagnation to unwind a similar imbalance. China's nominal GDP is slowing, local government debt exceeds ¥90 trillion, and the property sector that drove half the fixed-asset formation is contracting. The reckoning Pettis describes isn't theoretical risk — it's already underway.