Despite a weak year for China’s economy, there have been signs of stabilization in growth over the past two months. While observers have hoped the upturn would be the result of greater private sector activity, the driving force so far is still government stimulus through state-owned, investment-intensive industries. Private companies, meanwhile, have been starved of financing as an indirect result of the deleveraging campaign. China needs more time to develop trustworthy credit ratings institutions before private corporates can acquire greater access to financing and pick up the slack left by the old economy.
