China is Too Dependant on Investment

China has become so dependent on investment to power its economy that it is going ahead with such projects although the capital is ultimately wasted, he said.

"That does create jobs and growth in the short run, but if you can�t use it, you�ve wasted it," Rickards said.

China�s leadership, worried about a downturn in exports, wants domestic consumption to take on an increasingly important role in the economy. There is talk of floating the yuan and letting market forces shape its state-owned companies.

But as the country outgrows the planned economy, there are signs it is having trouble managing credit and that it's banks may be in trouble.

- Source, CBC:

http://www.cbc.ca/news/business/slowing-chinese-gdp-growth-worries-investors-1.2559940