Since the late 1990s, China's GDP has grown at a double-digit rate every year, the highest growth during the reform era. But this rapid growth is deceptive. It is due in part to the fact that the state can mobilize a huge amount of resources very quickly and thus can invest a large quantity of capital within a very short period of time, whereas had there been investment spending by the private sector, this would have stretched over many years. The growth is thus more compressed as compared with investments by the private sector, but the quality is likely to be poorer.
