China's Excessive Investment

Pingyao Lai

China & World Economy, 2008, vol. 16, issue 5, pages 51-62

Abstract: China's economy has witnessed serious excessive investment over the past 5 years, mainly in the infrastructure and real estate. Excessive investment has adverse impacts on both economic growth and macroeconomic stability. The main causes of this excessive investment are inappropriate growth strategies, low interest rates and weak constraints on government investment expenditure. To effectively control excessive investment, China needs to adjust its growth strategy, to speed up the process of interest rate marketization, and reform the existing public expenditure system. Copyright (c) 2008 The Author Journal compilation (c) 2008 Institute of World Economics and Politics, Chinese Academy of Social Sciences.

Date: 2008

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