While this argument suggests that the global trading system must make more room for a rising China (and India), it overlooks the need to address the enormous structural problems in China’s domestic sectors if export-led growth is to become sustainable. For these sectors, rapid investment-driven growth in the past decade has produced a mountain of excess capacity, reflected in stagnant prices and the banking sector’s soaring volume of bad loans, as price wars squeeze profitability and stimulate real-estate speculation.