China succeeded in raising the amount of economic growth it was able to generate through injecting new credit in 2017, suggesting that the government is beginning to tackle its tendency toward wasteful investment, according to Bloomberg.
Each dollar of economic output generated required about 28 cents of credit in China last year, down from just over 30 cents in 2016, Bloomberg Economics estimated based on China’s full-year gross domestic product data released Thursday.
The findings support the claims by analysts at JP Morgan that China’s inefficient capital investment has started to “bottom” and Nomura Holdings’ opinion that China’s “credit cycle has peaked.”