Fitch has a go at it today:
China’s One Belt, One Road (OBOR) programme will support domestic demand in some of the economies involved, and may help to resolve some infrastructure inadequacies. However, OBOR is driven primarily by China’s efforts to extend its global influence and relieve domestic overcapacity. There is a risk that projects might not be aimed at addressing the most pressing infrastructure needs and could fail to deliver expected returns, says Fitch Ratings. China’s shift away from an investment-led growth has created pockets of excess capacity across much of its industrial sector. Fixed-asset investment growth averaged more than 20% a year over 2010-2014. But growth fell to 10% in 2015 and 8% in 2016. The decline has been driven largely by weaker investment in the property and manufacturing sectors. Growth in infrastructure investment, which the government has used to stabilise the economy, has held up much better, but has still not matched the expectations – or plans – of many businesses.
China’s shift away from an investment-led growth has created pockets of excess capacity across much of its industrial sector. Fixed-asset investment growth averaged more than 20% a year over 2010-2014. But growth fell to 10% in 2015 and 8% in 2016. The decline has been driven largely by weaker investment in the property and manufacturing sectors. Growth in infrastructure investment, which the government has used to stabilise the economy, has held up much better, but has still not matched the expectations – or plans – of many businesses.
