By Michael Pettis
Now close to 50 percent of GDP, this paper assesses the appropriateness of China’s current investment levels. It finds that China’s capital-to-output ratio is within the range of other emerging markets, but its economic growth rates stand out, partly due to a surge in investment over the last decade. Moreover, its investment is significantly higher than suggested by cross-country panel estimation.
About The Author - Michael Pettis is a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University. He received an MBA in Finance, and an MIA in Development Economics, both from Columbia University. Michael is also the author of The Volatility Machine, and maintains a blog at china financial markets. (EconMatters author archive here)
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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