Recently the Economist had an article arguing that China is not overinvesting, it is, they claim, malinvesting. I am not sure that I fully understand the distinction, but I do not think it is meaningful in the context of this debate.
That's what I said (I was not as tactful).
So China has probably hit both constraints – capital is wasted, perhaps on an unprecedented scale, and the world is finding it increasingly difficult to absorb excess Chinese capacity. For all its past success China now needs urgently to abandon the development model because debt is rising furiously and at an unsustainable pace, and once China reaches its debt capacity limits, perhaps in four or five years, growth will come crashing down.
Similar comments in Hugh Hendry's April Eclectica letter.
Here is what I think the Chinese economy will look like over the coming years.