China's economy is on steroids, and things could get messy when they run out
Lending in the country has exploded: Chinese banks have extended more loans in the last three months than the entire US corporate-financing market ever has, according to Deutsche Bank.
There have also been several rounds of relaxation in property-purchase regulations, according to Morgan Stanley.
The government has stepped up spending too, with the fiscal spending-to-GDP ratio increasing 2% since March 2015.
That has bolstered slowing sectors in the economy. Y
They expect the current recovery cycle to continue for another three to four months, before a moderation in growth likely August or September.
Another way of looking at this is that the economy needs a higher dose of steroids now than it did in the past. That doesn't bode well for the long-run.
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