"Borrowers from China had $14.2 trillion in debt at the end of last year, exceeding every other country including the U.S., which had $13.1 trillion in company obligations, according to a report dated June 15 by Standard & Poor’s. Needs of Chinese issuers will increase to $20 trillion through the end of 2018, a third of the $60 trillion in global funding needs..
..China’s corporate issuers account for about 30 percent of global corporate debt, with one-quarter to one-third of it sourced from China’s shadow banking sector, S&P said. That means as much as 10 percent of global corporate debt, about $4 trillion to $5 trillion, is exposed to the risk of a contraction in China’s informal banking sector.."
Private borrowing has become increasingly reliant upon China's shadow banking loans over recent years. And so have Chinese companies which have become highly leveraged. If China's economy slows, or their property bubble deflates, it would have global implications.
Excessive debt is far from a China only problem. The BIS calculated that global govt debt is more than $100 trillion. This is 40% higher than that of 2007.
Impaired loans at EU banks have risen to over one trillion euro. The next global financial crisis will be more severe than the last, especially given that there's little left that govts could do to bailout banks - not without jepodising their own ability to borrow more money - and few bullets left by central bankers.
