China’s investment rate is extremely high in comparison with other major economies, and has been increasing steadily since 2001, creating first overheating and then overcapacity…

The government was too generous in helping revive real-estate demand, and, overwhelmed by fear of the negative impact of falling asset prices on economic growth, has been too cautious in dealing with bubbles when they have reappeared.

–Yu Yongding: 19 January 2010, op-ed, Korea Times. Despite recent increases in inflation, he would maintain, “Overcapacity is an important factor that will contain inflation.” Arthur Kroeber of Dragonomics argues that it’s too late, and inflation may be developing at the edges, “If that happens, the government will have to choose between a lower growth target or accepting higher inflation.”

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