Andy Xie

China's local governments are dependent on fees and taxes from developers. Builders gorge on no-cost credit from state-controlled banks to churn out high-end homes most Chinese can't afford. Sounds like a familiar recipe for disaster.

It's almost an article of faith in some economic circles Indian and Chinese households will increasingly support not only their own economies, but those of the rest of the world as well. A closer examination brings that faith into question.