Deutsche Asset Management in Hong Kong nominate areas of significant areas of progress for debt unwinding in China:

  • A drop in the stock of wealth-management products
  • A slowdown in the growth of loans between financial institutions
  • A drop in credit gains from shadow banking (eg. companies lending to other companies with banks as the middlemen)

DB say the POBC

  • has managed to take out a lot of leverage out of the system and make the system safer by keeping overnight rates up and policy rates flat
  • And financial market deleveraging "will be a real focus next year" after Xi consolidates his position

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