Comment by gitah

Can you elaborate?

From the article, Pettis assumes the following is true:

  1) China has overinvested in infrastructure and manufacturing capacity to such an extent 
  that in the aggregate the cost of additional 
  public sector investment exceeds the present 
  value of future increases in productivity generated by 
  the investment

and

  2) China's long-term sustainable growth rate is substantially below the economy's current GDP growth target

Why does he make these assumptions without also analyzing the technology improvement aspect? I don't see anything about that in this article.