The first caveat is that China's numbers are not the same quality as the numbers from open economies; while perhaps not entirely fabricated, they are certainly tainted by influence and non-standard accounting and reporting practices designed to make the CCP look good.
More importantly, the key here is the trend. When there is both a large overhang of debt, and simultaneously slowing growth, that is a recipe for trouble. If the scale and scope is minor, it can possibly be managed into a 'soft landing'.
If not, it could easily get out of control, and spiral into a liquidity crisis for that economy, and since there are so many links between economies, spread overall.
The real question is whether this is just a blip in a very large and noisy environment, or if it is the crumbling of some critical supporting bricks in their economic edifice?
More importantly, the key here is the trend. When there is both a large overhang of debt, and simultaneously slowing growth, that is a recipe for trouble. If the scale and scope is minor, it can possibly be managed into a 'soft landing'.
If not, it could easily get out of control, and spiral into a liquidity crisis for that economy, and since there are so many links between economies, spread overall.
The real question is whether this is just a blip in a very large and noisy environment, or if it is the crumbling of some critical supporting bricks in their economic edifice?