Problem of plenty

While the U.S.' role in global growth and crisis is well known, China is now emerging as the cause of capitalism's crisis of overproduction. China's 8-10 per cent annual growth rate has probably been the principal stimulus of growth in the world economy in the last decade. As a result, idle capacity in such key sectors as steel, automobile, cement, aluminium and real estate has been soaring since the mid-1990s, with estimates that over 75 per cent of China's industries are currently plagued by overcapacity and that fixed asset investments in industries already experiencing overinvestment account for 40-50 per cent of China's GDP growth in 2005. On the one hand, China's break-neck growth has increasingly depended on the ability of American consumers to continue their consumption of much of the output of China's production brought about by excessive investment.