The high-speed rail crash may serve as the moment when the shortcomings of state-driven...

|By:, SA News Editor

The high-speed rail crash may serve as the moment when the shortcomings of state-driven investment in China were laid bare. The Ministry of Railways took on a debt equivalent to 4.6% of GDP to build the network - money likely never to be recouped. For 2010, fixed investment in China totaled 46% of GDP - it's hard to spend even a fraction of that prudently.