At first blush, the latest data dump from the China's industrious National Bureau of Statistics had a decidedly bullish tone to it.
GDP kicked up another notch to an annualised rate of 6.9 per cent for the first quarter, beating market expectations and well above the Government's target of around 6.5 per cent, or "higher if possible".
Industrial production accelerated sharply in March, as did retail sales and fixed asset investment - a proxy for infrastructure spending.
All heady stuff, but buried in the detail was plenty of flesh for the China bears to gnaw on.
The "old economy" jalopy was still rattling along at breakneck speed, fuelled by high-octane debt.
Societe Generale's chief China economist Wei Yao noted the industrial sector - particularly metal mining and production - accounted for most of the acceleration in overall growth, while growth in the services-focussed tertiary sector softened.
Construction and debt is still driving China's growth
The red hot housing sector got hotter, despite official efforts to cool it down.
New home starts picked up again in March and land sale revenues jumped by 23 per cent, up from the not-too-tardy 13 per cent growth in February.
That helped drive steel production in March to record monthly levels and underpinned the surge in iron ore and coal prices earlier in the year, which is now unwinding apace.
Medium-to-long term loans to households - pretty well a euphemism for mortgage debt - grew by 800 billion yuan ($150 billion) in March, the quickest monthly growth ever recorded.
Total social finance - a measure for credit in the economy - was up 4 per cent on last year to 6.93 trillion yuan ($1.3 trillion), spurred along by more than 320 per cent growth in the shadow banking sector.
Global credit ratings agency Fitch noted that, even with a more modest growth target this year, credit growth will easily outpace GDP by a factor of between 50-and-100 per cent.
"[The rate of credit growth implies] a further rise in leverage across the broader economy this year, despite the authorities' acknowledgement of these growing financial risks," Fitch said in a recent research note.
So much for the government's pledge to crack down on debt and the measures it put in place to tighten up lending standards in property.
"Clearly, the housing tightening measures put in place late 2017 in about 20 big cities have not been very effective, as the strong momentum simply spilled over to lower-tier cities adjacent to those big cities," Wei Yao noted.
That momentum is likely to roll forward for some time, before a harsher round of tightening measures are likely to kick in.
Is the debt fuelled growth sustainable?
But the question is, what next?
ANZ's chief China economist Raymond Yeung told clients that, for a start, the 6.9 per cent headline growth figure needed to be interpreted with caution, given it would have needed quarterly growth of 1.6 per cent, rather than the 1.3 per cent the NBS calculated.
"It seems to us that the statistical bureau has adopted a different set of seasonal adjustment factors and that a smaller quarter-on-quarter rate has resulted in a higher headline growth.
But that is perhaps only a cosmetic concern, given the degree scepticism that already pervades the quick-fire calculation of GDP, which drops just a couple of weeks after the quarterly books are ruled off.
Mr Yeung has deeper worries about the quality of the growth.
"The Chinese Government has a tendency to rely on infrastructure development to sustain growth in the long term," Mr Yeung said.
That drive was underlined by the recent announcement of the development Xiong'an New Economic Zone, 100 kilometres south-west of Beijing.
The new zone in the heavily industrialised and polluted Hebei province will be primed to develop innovative and technology based industries, and is roughly modelled on the Shenzhen special economic zone adjacent to Hong Kong that helped drive China's economic reforms and growth 30 years ago.
Mr Yeung said the scale of the enterprise is massive.
While it will need a lot of steel and concrete, it will also need lashings of debt as well.
"The infrastructure build-out will eventually cover 2,000 square kilometres, a size similar to Shenzhen's, another top-tier city with GDP equivalent to 2.6 per cent of the national total in 2016," he said.
"The question we need to ask is whether this investment-led model is sustainable as the authorities have trouble taming credit."
As Mr Yeung pointed out last year, total loans grew by almost 13 per cent, with another 4.2 trillion yuan debt added in the past three months - roughly equivalent to almost a quarter of first quarter GDP.
"We need to watch closely whether China's top leadership will send a stronger signal to tighten monetary policy shortly," Mr Yeung noted.
Reining in debt poses big risks
However, it is a delicate balancing act according to NAB's Gerard Berg.
"While the PBoC (Peoples' Bank of China) appears to have a tightening bias, given the rising US fed funds rate and the attempts to control capital outflows, the risks associated with high debts in the corporate sector mean that the PBoC is likely to be cautious with its rate increases," Mr Berg said.
While it is one thing to deflate a bubble, it is entirely an entirely different thing to accidently burst one.
Clearly some of the speculative exuberance in commodities has started to wane in the face of what is expected be a renewed effort to rein in debt.
Iron ore prices have tumbled more than 25 per cent since the start of the year and the market is now deeply in bear territory.
At the same time a 130-million-tonne mountain of stock-piled iron ore has grown around Chinese ports.
Mr Berg said NAB is sticking to its - and the official - forecast of 6.5 per cent GDP growth, as the construction-led boom is likely to start cooling in coming quarters.
With the GDP target already pretty well in the bag after just one quarter of 2017, the Government may turn its attention to reining in debt and a run away property market sooner rather than later.
That would not be great __news for the big commodity exporters, or their investors.
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