Asia’s lesson for China: rebalancing hurts

By Leith van Onselen

From Bloomberg today, via Twitter, comes the below chart showing how economic growth slowed down significantly in South Korea, Japan, and Taiwan in the ten years after each economy reached peaked investment:

The chart serves as a stark warning to China as it seeks to shift growth away from fixed asset investment towards consumption. It also provides a harbinger of what might be in stall for the Australian economy as the once-in-a-century mining investment boom unwinds (see next chart).

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