I was on CNBC today giving my view on the Chinese economy and the recent market sell-offs. There are good reasons for my pessimism on China. One is the massive build-up of debt over the last few years. Second and more important is that the debt build-up has in large part been driven by an unprecedented amount of investment, much of which has been wasted. This translates ultimately into nonperforming loans for the banking system which will constrain future investment, and with it the Chinese economy. Investment is an astonishing 47% of GDP, more than double countries like Japan (22%), so a slowdown in investment cannot but have a major impact on the economy. The video can be viewed below or by clicking here For Chinese consumption of concrete, see here.

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