China may deserve a round of applause for notching economic growth of 8.9 percent while most of its peers struggle with recession. Even next year, as other nations revive, China will still account for more than a third of global growth, according to Roubini Global Economics.

On reflection, however, this thumping growth rate is less of a boon for the rest of the world. Instead of being a driver of global growth, China will remain very much a passenger. Its contribution to the rest of the world will be based more on accounting than on reality.

Today’s GDP figures provided further evidence that in its efforts to avoid a slowdown, China has been stoking over-capacity.

Even before the release, officials estimated that the peak output of steel was about 40 percent greater than expected demand. Purchases of cement, meanwhile, may absorb only two thirds of the industry’s potential production.

Despite this looming glut, China’s state banks continued until recently to shovel record funds into heavy industry — more than $1 trillion in the first six months of the year. The consequences of this investment binge will last well into next year.

While the fiscal stimulus package wisely focused on infrastructure and consumer spending, this state-directed lending is setting up serious problems for China and the global economy.

The economy has become ever more tilted toward investment. Up to September, it contributed 7.3 percentage points to a growth rate of 7.7 percent. Fixed investment in urban areas was up by 33 percent in the first nine months of the year — double the pace of retail sales growth.

Sliding producer prices, which plunged 7 percent over the year, suggest that over-capacity might already be starting to pose problems. As the investment tsunami generates ever greater output, China faces a series of threats.

Deflationary pressures could intensify, while employment growth slows and non-performing loans surge. Under these conditions, exporting will become an ever more important pressure valve for China — precluding substantial progress in allowing the yuan to appreciate and further souring relations with the United States.

Besides, these capital intensive sectors are a poor source of job growth compared with the labor intensive service sector.

It is already too late to stop much of this. Moves to stem bank lending to heavy industry were necessary, but were applied long after the horse had bolted.

To prevent the problem from getting any worse, China urgently needs to remove the underlying incentives to over-investment in heavy industry. These sectors still benefit from access to subsidized energy, artificially cheap credit and bargain-price government land.

Withdrawing these perks will be politically vexed but is essential to creating more balanced growth in China, with stronger employment growth and more robust household consumption.

Robust Chinese growth will be a cause for celebration — both in the nation itself and abroad — only when it is more balanced.