We’ll turn to new evidence that the situation is getting worse, not better, despite China reporting 5% GDP growth for the last quarter. Aside from the fact that there is long-standing skepticism about China’s official growth figures, the growth that China has been having had been in its exports. Local governments pour money into industries, creating a flood of companies all fighting to come out on top. Businesses get cheap loans from Chinese banks, as well as investments and tax breaks from local governments. Using the central government’s clean balance sheet to support household demand would actually make it easier for households, property developers and local governments to delever.