Is there excess capital accumulation in China resulting from excess savings and capital controls?

Compared with other emerging countries, China is characterised by: A very high national savings rate; Controls on capital outflows. This means that the huge savings of the Chinese have to be invested in China, at equilibrium leading to , one may fear, excess investment and capital compared with what would be optimal, and also to abnormally low real interest rates. We try to determine whether there is excess capital accumulation in China by comparing China with other emerging countries, and by starting from the relationship between labour productivity and capital intensity on the one hand, and between growth rates and investment rates on the other hand. We see that - which may come as a surprise - there is no anomaly in China: the level of capital is not abnormally high relative to the level of productivity, the investment rate is not abnormally high relative to the growth rate corrected for the contribution of employment.