UBS - China's Minsky lurks in local government credit boom 5-15min

Something is going to have to give. The credit boom could presage a pick up in near-term growth, but the point is that sooner or later, the government is going to have tighten credit policy and shadow banking regulation more than it has done so far. Sooner would risk some economic growth, later would risk financial stability. It’s a political choice, which the government must feel emboldened and confident to make: five years of 5% real growth, for example, gets you to the same place as a year of around 8%, followed by four years at 4%, but without disruptive and politically sensitive consequences.