Dr. Doom Hits the Chinese Nail on the Head

I don't usually agree with Nouriel Roubini but he nailed this one.  A sample:

The problem, of course, is that no country can be productive enough to reinvest 50% of GDP in new capital stock without eventually facing immense overcapacity and a staggering non-performing loan problem. China is rife with overinvestment in physical capital, infrastructure, and property. To a visitor, this is evident in sleek but empty airports and bullet trains (which will reduce the need for the 45 planned airports), highways to nowhere, thousands of colossal new central and provincial government buildings, ghost towns, and brand-new aluminum smelters kept closed to prevent global prices from plunging.

Roubini's  post vividly illustrates some of the reasons I'm quite bearish on China.  How can the whole world be so excited about a command economy?  Has there ever been a centrally-directed economy that creates long-term prosperity?  Tweet