Indeed, China must stem the pace of real-estate investment, which accounted for more than 13% of GDP in recent years – a move that will undoubtedly lead to slower economic growth and, in turn, reduce the profitability of China’s nonfinancial corporates further. Moreover, ongoing interest-rate liberalization – which has occurred both openly and surreptitiously – means that artificially low borrowing costs have become far more difficult to maintain.