Summary

Brian discussed the risk of a sharp slowdown or outright bust in China, arguing that the investment-led growth model is exhausted, the property downturn is creating a large and unresolved balance-sheet shock, deflationary pressures are intensifying, fiscal and credit stimulus are increasingly ineffective, consumption rebalancing is unrealistic, and that a reflationary currency devaluation may ultimately be the only viable route out of China’s debt-deflation trap, with significant implications for global growth, commodities, currencies and markets.

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