New leadership looking to revamp China’s economic growth model

BEIJING — For years China has fueled its booming growth with investments aggressively pushed by local officials, who have used their power to secure land and take other measures to boost government coffers and economic output.

But much of the government-led investments for exports and other products have been wasteful, leading to artificially high real estate prices, excess supplies, soaring debts and other market distortions that have contributed to a widening income gap and social unrest.

“In China, the most important productive factors — land, capital and natural resources — are allocated by government,” said Mao Yushi, co-founder of the Unirule Institute of Economics, an independent think tank in Beijing. “The efficiency is very low.”

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Don Lee, Los Angeles Times via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/qhmHhr6Ii7I/