Is China over-investing?

While China's average capital productivity has fallen and is now less than in other major economies, measures of the marginal efficiency of capital suggest China's investment is still adding value.
From a stock market perspective, China's return on equity is in the middle of the range of our comparator countries. We believe this implies China's price/earnings ratio should be below that of the US but above those of the EU and Japan (for any given price/book value ratio).
For our more in-depth assessment click here.