For example, conceptually, the statement “Importantly, FAI growth has been consistently higher than GDP growth” may be misleading, because those two rates are not comparable. One normally uses constant prices and the other uses current prices, in an environment with inflation.

Secondly, the issues raised in the first three of the five concerns: In the context of over capacities at the center of issues that Prof Yu thinks so problematic, are deeply contradictory to the central problem. Where are the over capacities, manufacturing related to exports or infrastructure like roads that are not tradable?

It would have been even more interesting to have examined China’s consumption pattern, historically and for the future. Can increased consumption take the place of some investment and take the pressure off ‘over-capacity’. Substitution of consumption for investment would also most likely lead to improved investment efficiency as reflected in the incremental capital output ratio which is probably deteriorating by the hour.

Increased consumption might also help pay the tolls on those empty eight lane freeways, as consumers would make more trips to the market places and shopping centers.

More investment in manufacturing capacity? I did not follow the case for this. Industrial output in China is already close to 50% of GDP, the highest in the world. Would not it be better to now stimulate the service sector, an expansion of which is a likely consequence of increased consumer demand?