China’s economic imbalances are turning only more precarious. For example, there are an estimated 300 EV manufacturers in China. Talk of “deflation” misses the point. The maladjusted Chinese system now requires upwards of $5 TN [in new debt] annually to hold systemic Bubble collapse at bay. At Beijing’s direction, “Terminal Phase” Credit excesses continue to promote rapid expansion of increasingly suspect loans. Enormous amounts of new Credit are being allocated to uneconomic enterprises, either funding the investment spending necessary to meet growth goals or extending additional Credit to loss-making enterprises to keep them afloat. Importantly, this is prolonging the parabolic rise in system risk, the type of late-cycle dynamics that risks a crisis of confidence in a system’s banking system and currency.
https://creditbubblebulletin.blogspot.com/2024/01/weekly-commentary-pricing-six-cuts-and.html
China: a deepening property crisis, mounting deflationary pressures and weak demand reinforce expectations that Beijing will have to roll out more stimulus measures soon.
https://www.reuters.com/world/china/chinas-q4-gdp-grows-52-yy-below-market-forecast-2024-01-17/
h/t mark000