Comparing China and 70’s high-growth Japan

Interesting chart via Financial Times Alphaville from a presentation by C.H. Kwan at Nomura's Institute of Capital Markets Research:

The right-hand column (ICOR – incremental capital output ratio) shows how extremely unproductive China’s capital is compared to Japan, South Korea and Taiwan during their transformational expansions. And that Chinese capital productivity has actually worsened in recent years:

It's hard to look at the Chinese government's approach to development and wonder how that can be a sustainable way to grow. When 48% of the economy is capital investment, much (most) by centralized, all-powerful bureaucrats, the word "bubble" seems too bland to describe the inevitable crash.