"This complicates the rebalancing story, since rebalancing toward services is occurring but rebalancing toward consumption is not," said Miller.
Does China need stimulus?
The biggest misconception around China is the need for stimulus, said Miller.
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"There's the idea that China needs to stimulate because it's slowing down, but things are better underneath the surface than most people think," he said.
While there is room to stimulate based on fact there's disinflation in the economy, growth is modestly recovering and the labor market is holding up "much, much better" than people understand, he said.
Nevertheless, deflationary headwinds could prove too tempting an opening for Beijing to resist strong stimulus, Miller said.
"Our finding of no 2014 deflation will likely be challenged in 2015. There has been continuous disinflation since the first quarter of 2013, with sales prices, wages, and input costs still increasing, but more slowly," he said.
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"While outright deflation has not set in, the impact of the collapse of crude oil prices has yet to be felt. Deflationary concerns are now justified," he added.
Stimulus won't work
If monetary authorities attempt large scale stimulus, it may not work as intended, says Miller. The main result will likely be "out-of-control" prices for equities.
"Firms have not been interested in borrowing or spending on new projects for a year now. What they might be willing to do, if enough credit is made available, is jump into China's suddenly frenzied stock market," he said.