Chinese debt increasingly inefficient.

China's broadest measure of credit rose 58% to a record 6.16T yuan ($1T) in Q1, but that debt has become less effective: each $1 of credit added 17 cents to GDP, down from 29 cents last year and 83 cents in 2007. "Less efficient and more highly leveraged borrowers...(are) tying up credit that could be used to generate more growth," says former Treasury economist David Loevinger. The solution is to boost the more profitable private sector.