China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says
I think the best model to understand this is Michael Pettis&#x27;s balance sheet analysis. He covers it extensively, but here&#x27;s his latest digest of the model:<p><a href="http:&#x2F;&#x2F;carnegieendowment.org&#x2F;chinafinancialmarkets&#x2F;66221" rel="nofollow">http:&#x2F;&#x2F;carnegieendowment.org&#x2F;chinafinancialmarkets&#x2F;66221</a><p>It really makes clear how stark the choices are for China. The debt binge of the last ~10 years has masked the flattening out of productive investment, and there will need to be a reckoning. Hopefully it&#x27;s a soft landing, but that will depend on politics as much as anything.