Interesting article, thanks for posting! While I agree that there has been over-extension with regards to infrastructure development especially in residential housing, one thing I think we should remember is the power the central government in China holds to change course when necessary, even when a crisis has not yet occurred (imagine living in a country that can ground all flights for a day with no explanation and people take that as par the course: http://on.wsj.com/1wVToAd). A similar point on over-extension could have been made about US expansion in the 2000s being completely attributed to the debt-induced US housing bubble, but our government had no focus or institutional power to stop that until the crisis had already occurred. In this case at the governmental level, China, with its ability to set long term policy and pre-empt crises, might have a leg up.

Corruption is endemic in the ruling class who own much of China already. It will be really hard for the government to turn themselves and their families from winners into losers...so the effects of whatever reforms they take will probably fall on the have-nots, who might not take that very well.

It's good to hear from an observer who has been in China in recent years on topics like this.

This is an excellent example of what is wrong with China journalism today, drawing sweeping conclusions based on a handful of cherry-picked anecdotes. For an article with actual analysis, try http://www.economist.com/blogs/freeexchange/2014/11/chinas-i....

Yes, this article is terrible.

"Shift the economy toward innovation? That is the mantra of every advanced economy, but China’s rivals have a big advantage: Their societies encourage free thought and idiosyncratic beliefs"

Which can be translated to "this people are different from us, how could they ever be successful?"