Your annual growth figure is old (the official number is now around 6.5%; apply generous amounts of salt as usual), but your concern is even older. Read this, a

Your annual growth figure is old (the official number is now around 6.5%; apply generous amounts of salt as usual), but your concern is even older. Read this, and note the date: http://www.economist.com/node/125768 http://www.economist.com/node/125768 China has had a non-performing loan problem almost as long as it's had a (pretense of a) market economy. Confused Westerners look at those numbers and interpret them as they would in a Western economy, apparently forgetting that in China, even being a billionaire won't protect you from being disappeared at the rulers' convenience. Getting bailed in, i.e. having your claims on some bank or SOE "legally" declared null and void (remember, there is no independent judiciary in China), is far from the worst thing that could happen to a Chinese lender. Can such a system "collapse"? Unlike Venezuela, China is not ruled by a former bus driver; it's a technocracy run by reasonably intelligent people playing a long game. It's oppressive and inefficient, but it has the ability to forcibly redistribute even severe pain. Collapse, in the usual sense of abrupt change, would require something like a new political revolution. Hence the steady ratcheting up of central control. They are definitely not going to repeat Gorbachev's "mistake". What you do? If you are really worried about this, you don't lend to or invest in entities which are significantly exposed to China. If you are really worried about it, you look for ways to short them (oh look, a Tesla factory in Shanghai?).