A high-speed train leaves Shanghai  © Getty Images

I am writing this on a high-speed train between Nanjing and Shanghai, two cities on China’s east coast 300 kilometres apart. The price of a first-class seat is $35. It is a bargain. High-speed railways have reshaped China’s geography. The economic return on infrastructure, on which most of the country’s public debt is spent, is low — but its social return is very high.

When I speak at international conferences, certain questions about the Chinese economy are always asked by the audience. How should we interpret the gross domestic product figures? Is the country moving back to its old investment-driven growth model to pull it back up to its potential? Is the rate of return on capital declining? Will the mounting public and private debt lead to a major crisis? Those are legitimate questions, particularly in light of the discrepancy between the country’s official GDP figures and people’s feelings on the ground. Read more