China's economic rebalancing is creating a host of issues. Most pressingly, government attempts to discourage overinvestment in the real estate and infrastructure sectors are slowing economic growth. Several short-term strategies are available to ease this transition, most promisingly an expansionary fiscal policy that increases private consumption. However, China will also need to make longer-term strategic changes to support its rebalancing, namely by creating alternative outlets for excess savings. Above all, these outlets will need to include more productive investment opportunities....
