China business activity recovering thanks to 'credit-soaked' quarter: Beige Book

SINGAPORE - China’s economy showed “unmistakable” signs of recovery in the first quarter, with company profits, investment and hiring improving, but policymakers may be relying too much on extraordinary levels of credit, a private survey showed on Wednesday.

CBB’s findings were in contrast to mostly downbeat official data for January and February and other business surveys which suggest recent stimulus measures are only slowly kicking in. Most analysts have also warned of a rocky first quarter, and do not expect China’s economic downturn to bottom out until mid-year.

“Credit is surprisingly expensive... Credit costs need to be further stabilized or the current rally will falter,” CBB said in a statement, saying shadow lenders were charging sky-high rates.

Translation: thanks to more fuel in his HUGE DEBT BUBBLE.

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