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Submitted by Hao on
Louis, you are right that we now have ample spare capacity in China. To make things worse, with the soaring bank lending and fiscal stimulus, we are creating more overcapacity and unproductive investment. No doubt, as you said, that will result in NPL problems. But the more important thing, sure this isn't your topic here, is China's growth is even more unbalanced. This crisis should have been a good chance for China to rebalance the economy, but we just missed the opportunity. Just take a look at the yuan's trade weighted value in the past year -- that was not the right attitude for balancing the economy. I don't think the government-engineered recovery will be self-sustaining.