In the aftermath of the Wall Street crisis that brought down Lehman Brothers in 2008, Chinese state capitalism came to the rescue. As WSJ’s Andrew Browne writes in his “China’s World” column:

Thank China for constructing, in record time, the world’s most extensive high-speed rail network, airports, subways and intercity highways. The frenzied spending prevented the global economy from toppling into a depression, argues the Nobel-winning economist Joseph Stiglitz.

Today, the mountain of debt and massive industrial overcapacity dating from that government-directed stimulus is often described as China’s “hangover.” But the party hasn’t stopped. In fact, it’s heating up.

Total debt has ballooned from less than 160% of gross domestic product to nearly 260% now. More was added, relative to the size of the economy, over the past 12 months than at the outset of the investment binge. Except now China can’t absorb all the extra investment. Much of it is going to waste, and companies are using new debt to pay off old.

Read the full column on WSJ.com.