How China's rebalancing just got harder

China's economic rebalancing will be hard enough. But revelations the trade surplus could be larger than estimated, and evidence of scepticism from the country's rich, suggest the challenge is bigger than it appears.

In China, I have argued many times, high growth is no longer compatible with a strengthening balance sheet. If China is growing at a rate that approaches or exceeds 5 or 6 per cent, it is probably a safe bet that debt is rising faster than debt servicing capacity.

The good news is that the current leadership seems very clear about the need to implement reforms, and also understands that this is going to be politically a difficult process.

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