"I would say their economy is maturing with domestic consumption becoming a dominant portion." You've got it completely wrong. Consumption in China has been r

"I would say their economy is maturing with domestic consumption becoming a dominant portion." You've got it completely wrong. Consumption in China has been rapidly decreasing with respect to GDP. Their consumption was some 55% of GDP in the 90's. Then it came down to 46% around 2000 and now it stands at 34%. [[1]] All the efforts that China made to increase consumption didn't materialise. The fast growing Chinese GDP is only giving an illusion that Chinese people are massively consuming. But that's not true. On the other hand, the percentage of fixed-investment (roads, bridges etc.) to GDP has been steadily increasing in China. If Jim Chanos is to be believed, the fixed-investment now stands at a whopping 70% of GDP. [[2]] This seems to be the actual lifeline of Chinese economy. So in order to maintain the GDP growth, China has been recklessly building roads, bridges etc. fuelled by local government debts. [[3]] This has been creating massive bad-loans, over-investments and bubbles. China is building not 'because of' its economy. It is building 'for the sake of' its economy. This won't see a happy ending. [[1]] http://www.bloomberg.com/news/2011-06-16/consumers-fade-in-china-economy-racked-by-inflation-with-peak-days-gone.html http://www.bloomberg.com/news/2011-06-16/consumers-fade-in-c... [[2]] http://www.moneynews.com/StreetTalk/jim-Chanos-Soft-Landing/2011/02/02/id/384774 http://www.moneynews.com/StreetTalk/jim-Chanos-Soft-Landing/... [[3]] http://www.moneycontrol.com/news/features/why-china39s-local-government-debt-is-so-scary_563013.html http://www.moneycontrol.com/news/features/why-china39s-local...