China's economy shifted in 10 years

Between 1995 and 2005, China's total trade has increased from 37.1% of GDP to 62.4% of GDP (Exports increased from 19.4% to 33.4%, and imports increased from 17.4% to 29%). Gross investment has increased from 33% to 41.5%. Total FDI has increased from 3.2% to 5% of GDP. Consumption, on the other hand, has dropped from 44.9% of GDP to 38%.

It is no doubt that China's economic growth now hinges more and more on two pillars: foreign trade and domestic physical investment. What is worrisome is the latter: one wonders how much of the investment is driven by the fervor of local officials, and if those projects will ever turn up any real profits. If bad projects are financed by state banks as before, more trouble is ahead.