More signs of unbalanced Chinese growth

The latest Chinese GDP release came in right in line with expectations at 6.7%, but the growth came at a cost. I had written about this problem in my previous post, Big Trouble with 5-year China?). The Chinese authorities appear to be up to their old tricks again of using credit to drive growth, which is a worrisome sign.

The markets had been signaling this shift in policy for several months. My New China-Old China pairs had been rolling over in favor of Old China, where "New China" is represented by stocks exposed to the Chinese consumer and "Old China" is represented by financial stocks.

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