When the Dragon stops spitting fire

Is China about to collapse under the weight of over-investment? No, but its economy is set to slow down and possibly by a lot. The repercussions will be felt around the globe.

Economic theories say that the main difference between rich and poor countries is their capital-labor ratios: rich countries have accumulated more capital and thus their workers have more capital to work with making them more productive. This means for poor countries to catch up, not only they have to invest in capital they have to invest more so than rich countries. But investing requires resources. Most poor countries don’t have high enough savings to finance the needed investment, so they turn to fickle foreign sources. In contrast, the few those that do have high savings tend to invest more and grow faster.  

...