China Credit Quality & Debt Transition Simulator

Net Credit Impulse -1.8% Aggregate Social Financing momentum

Capital Productivity Gain +18.6% Output efficiency per credit unit

5-Yr Debt-to-GDP Delta -12.4 pp Macro leverage trajectory shift

Sustainable GDP Growth 4.4% - 4.8% Quality-adjusted trend rate

Sectoral Credit Allocation

Property Sector Credit Share 24.5%

Peak era: 30%+. Deleveraging drag is intentional.

LGFV & Infrastructure Share 21.0%

Shift to direct municipal bonds & debt resolution.

High-Tech & Green Credit Share 18.5%

Advanced manufacturing, EV, solar, semiconductor.

Baseline TSF Growth Rate 8.2%

Reallocation Efficiency Multiplier 1.42x

Macro Mechanism: Credit slowdown in property developers and LGFVs lowers overall TSF growth, but credit rotated into advanced manufacturing yields ~1.4x higher marginal value added, reducing long-term systemic debt risks.

5-Year Total Social Financing & Debt-to-GDP Trajectory Baseline vs Rebalanced Scenario

Credit Allocation Breakdown

Sector Target	Allocated Share	Marginal ICOR
Property & Real Estate	24.5%	7.8 (Low)
LGFVs / Off-Budget Infra	21.0%	6.5 (Medium)
High-Tech & Green Sector	18.5%	3.2 (High)
Commercial & Household Base	36.0%	4.5 (Stable)

Macro Diagnostics

Diagnostic Metric	Simulated Value
Credit Intensity per GDP pt	1.78x TSF
Debt Service Coverage Buffer	1.45x
NPL Absorption Runway	4.8 yrs
Structural Quality Index	78.4 / 100