The best gauge of the efficiency with which an economy’s resources are used is so-called total factor productivity (TFP). It is calculated as the percentage change in output that is not accounted for by changes in capital and labor inputs. If both of these inputs remain unchanged, TFP is the percentage increase or decrease of output. It thus focuses on resource use, including changes in the organization of production. As recent OECD figures show, TFP growth has been most remarkable for China followed by several other Asian economies, such as India, Singapore, South Korea, and Indonesia (“Secret Sauce,” November 14, 2009). In terms of TFP growth, Japan does not differ much from Britain, Germany, and the United States. As you point out, these figures undermine a common claim that China’s rapid growth has been based solely on over-investment in capital. Instead, they show increasing efficiency of use of the available capital and labor resources. You also point out that China’s surge in infrastructure spending helps greatly in this connection, as infrastructure provides for better connection between the available resources, which are thus better used to increase output. Your concluding claim that “China’s growth is still too capital-intensive” is thus surprising. If the country’s TFP is way ahead of the rest of the world, whence your verdict?