China's economy is facing a serious imbalance.

From the perspective of macro-economy, the imbalance manifests a sharp fall in economic growth and the lack of growth momentum.

From the perspective of micro-economy, the imbalance is reflected by the decrease in profits made by the enterprises and the increase in the bad debt, which eventually manifested as the vicious cycle of debt-deflation.

Anbound’s research team is of the view that the task to break the vicious cycle of debt-deflation and to revitalize private investment is the uphill task that China has to face in realizing its economic transformation.

The only solution seems to be to continue with vigorous promotion of reform measures to give greater vitality to the market and to allow the market to play a dominant role.

In the short term, the capital easing measures should be implemented to buy more time to implement the reform measures.