China confounded widespread expectations of a sharp slowdown in economic growth in 2016. But the longer China's credit boom continues, the less likely it will be that policymakers can achieve a smooth transition to a sustainable economic path.
Though the accuracy of China’s official GDP and growth rates has long been a hotly debated topic, few have been challenging the credibility of its official investment statistics. But here, too, there is plenty of reason for doubt.
Optimizing its resource allocation is far from all that China must do to boost prosperity. It is time to focus on workers and elevating the experience of their labor, the importance of which economists from Adam Smith to Karl Marx and Alfred Marshall have placed at the center of their concerns.