Mid Term

China’s 6.7% GDP growth built on a mountain of new debt

China’s 6.7% GDP growth hinged on another quarter’s worth of debt financing for an economy that’s already eyebrows deep in debt. Money supply climbed at a 13.4% rate in the quarter as the People’s Bank continued to pump cash into China’s economy. New loans by Chinese banks climbed to 1370 billion yuan in March. Aggregate growth in new financing was more than double the rate in the fourth quarter.

Early signs of slippage in earnings forecasts?

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