China risks falling into a vicious cycle of deflation and debt, Morgan Stanley economist says

• China's deflation pressures debt levels higher, which lowers consumer spending, Morgan Stanley's Chetan Ahya said.
• It's a dangerous "loop" that Beijing must break, he wrote in the Financial Times.
• But current policy has been too "hesitant," and needs to focus on stimulating consumption.

Officials in Beijing need to apply a more forceful approach in reversing deflation or risk worsening the problem, Chetan Ahya, Morgan Stanley's chief Asia economist, wrote for the Financial Times.