China’s Bad Growth Bet
Despite the rhetoric of China's new Five-Year Plan – which, like the previous one, aims to increase the share of consumption in GDP – the path of least resistance is the status quo. That means more fixed-investment growth – and thus a sharp growth slowdown, probably after 2013.
LONDON – I recently took two trips to China just as the government launched its 12th Five-Year Plan to rebalance the country’s long-term growth model. My visits deepened my view that there is a potentially destabilizing contradiction between China’s short- and medium-term economic performance.