1/6
In what seems like a very interesting comment on the issues facing the Chinese economy, PBoC Governor Pan Gongsheng warned that China's 'ongoing economic transformation will be a long and difficult journey, but it’s a journey we must take.'

bloomberg.com/news/articles/…

2/6
He went on to say: 'The traditional model of relying heavily on infrastructure and real estate might generate higher growth, but it would also delay structural adjustment and undermine growth sustainability.'

That seems a pretty significant statement to me.

3/6
That's because I think it may be one of the few times a very senior official has publicly put both property investment and infrastructure investment in the same 'unsustainable' category. The former has been acknowledged since 2021, but China still encourages the latter.

4/6
It suggests there is a growing sense that China needs to to move away from both as a way of getting debt under control and of making growth more sustainable, which of course wouldn't be the case if infrastructure spending actually benefitted the underlying economy.

5/6
In discussing China's local government debt problems, he noted that debt is unevenly distributed within the country, saying that economically more advanced regions in central and eastern China won’t have a problem repaying their debt. The implication is that the rest will.