China is the world's second-largest economy, and it has contributed most to global growth since the Great Financial Crisis. At Arcano Research, we have written extensively about China, outlining the severe issues it has faced since the outbreak of its real estate crisis in August 2021. These problems will result in much slower economic growth in the medium term, raising a daunting prospect: China is unlikely to overtake the US as the world's leading economy. Time has proved that our initial outlook still holds. In this in-depth report, we analyse China's medium-term challenge of high leverage and unprofitable investments. Addressing these imbalances will result in a protracted period of a slower pace of economic growth, with the potential risk of a financial crisis unfolding.