These statistics are not really news, but we thought we’d just remind readers of the perils of the Chinese economic model in its current state. In a simple phrase: Chinese debt is not getting the proverbial bang for the yuan that it used to. What we mean is simply that loan growth has continued to grow at about a 14-15% annual clip since 2011, but nominal GDP growth has slowed from almost 20% to less than 6%. Each marginal yuan of debt in the Chinese economy is adding less and less top line growth. In general it’s a problem when your balance sheet is growing 2.5x faster than your income statement, especially when the divergence is almost certainty likely to widen in the quarters and years ahead. To be sure, we are not calling for the imminent demise of the Chinese economy, but the model of fixed investment as the driver of economic growth is no longer sustainable and the Chinese leadership certainly know this.