Pettis once again takes The Economist to the woodshed for sloppy thinking

So if anyone wants to continue to be very bullish about Chinese growth prospects over the next decade, it seems to me that he must address and answer  these three questions:

 
1. How much debt is there whose real cost exceeds the economic value created by  the debt, which sector of the economy will pay for the excess, and what is the mechanism that will ensure the necessary wealth transfer?


2. What projects can we identify that will allow hundreds of billions of dollars, or even trillions of dollars, of investment whose wealth creation in  the short and medium term will exceed the real cost of the debt, and what is the mechanism for ensuring that these investments will get made?


3. What mechanism can be implemented to increase the growth rate of household  consumption?

I had similar comments in May to The Economist's China issue.
"Wrong on sooo many levels. Yeah, when you "invest" in millions of units of housing that are empty then this is both a misallocation of capital and an overinvestment of capital. You have lit money on fire. This money is gone  forever. Also, "The Economist" provides no hope or insight as to why a flawed  investment process (driven by corrupt SOEs) will do better the next time  around."