"12. Non-food commodity prices are set to collapse over the next three to four years.“Collapse” is not too strong a word. China’s share of global demand for such commodities as iron, cement, copper, etc. is completely disproportionate to its size and almost wholly a function of its very high growth in investment. As investment growth drops sharply, as it must, global demand for non-food commodities will plummet."
I made a copper short call in Feb. 2010 based on China's emminent collapse that has turned out to be wrong.
Pettis is too kind to my profession.
"4. Investment is being misallocated on a massive scale and this was not due to any special Chinese characteristic but was rather a fundamental requirement of the way the system operated. Although there are still some economists who disagree that investment is being massively wasted, I think this is so well understood by now that there is no need to belabor the point."
I don't think economists or investors or the public at large really undrestand this point at all.