Michael Pettis makes a strong case for (relative) China-pessimism at The Economist:

If it is true that capital is being misallocated, then it is also true that initially GDP growth will be inflated by the extent of the overinvestment, but in later periods, as the resulting debt is repaid, the losses will show up as lower GDP growth. This is an intensely debated point in China and we won’t know for sure for many years, but historical precedents suggest that it is very likely to be true. Every previous case of extremely rapid investment-driven growth, in which interest rates were set artificially low and credit risk socialised—whether the USSR in the 1950s and 1960s, Brazil in the 1960s and 1970s, Japan in the 1970s and 1980s, or the Asian Tigers in the 1980s and 1990s—has resulted in years of overinvestment and capital misallocation, during which time growth rates seemed miraculous.

To put a number on this, Pettis predicts 5 percent annual growth in China over the next decade. Given extreme regional inequalities, one wonders how this will translate, e.g., will we see a more balanced growth pattern, with indigenous entrepreneurship sparking growth in the Chinese interior as coastal regions peacefully decelerate? Or will the interior fail to close the gap, renewing urban migration pressures and exacerbating political tensions? Rapid economic growth has a way of defusing conflict. Sharp slowdowns have the opposite effect.