Signal China works through a partial balance sheet reset with debt at all-time highs

Summary

MGI reads China as working through a partial balance sheet reset amid falling real estate and questions about future growth drivers, with productivity growth receding though still above advanced-economy rates, inflation and nominal interest rates down and deflation concerns rising, lower household property investment offset by corporate investment led by state-owned enterprises and by government spending, and corporate and government debt both at all-time highs.