In its third-quarter survey of 3,300 firms and 160 bankers across 34 industries, the China Beige Book also found that companies borrowed at the second-highest rate in four years, contrary to widespread beliefs that China is reducing its use of credit to fuel growth.

“Most of the year when the Chinese government has been talking about deleveraging that has not been evidenced in China Beige Book data,” Miller said. “At least part of the time corporations have had even easier access to capital and even when conditions have been tightening it has not contributed to deleveraging or slower deleveraging.”

S&P Global Ratings downgraded China’s long-term sovereign credit rating to A+ from AA- last week based on “increased” risks to the economy and financial system from China’s “strong credit growth.” The move followed a similar downgrade by Moody’s in May.

“We are still very concerned about China’s debt growth” but Chinese authorities have made a “good start” in limiting credit growth, James Daniel, assistant director of the Asia and Pacific Department at the International Monetary Fund, told CNBC Monday.

The big question, he said, is “will the government continue with this [deleveraging] if and when the economy begins slowing?”

That said, China’s economy remains one of the fastest growing in the world. The IMF said in August that it expects the world’s second-largest economy to average growth of 6.4 percent a year between 2017 and 2021, versus 6.0 percent last year.

The China Beige Book brief also said that while the third quarter was weaker than the second, 2017 overall “still looks far better than 2016 and much of 2015.”

“Profits are much better than last year, with even property contributing to that for the moment. Most importantly, hiring remains robust,” the report said. “The worry is not how the economy is faring now, but where it is headed.”

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