"and the banks are actually pretty good at deciding who is too risky to lend money to" Uh, no. Chinese banks are politicized, they lend for the strategic impe

"and the banks are actually pretty good at deciding who is too risky to lend money to" Uh, no. Chinese banks are politicized, they lend for the strategic impetus of the government, which in itself is often really just the result of patronage (read: soft corruption) anyhow. And even without that you have crazy targets which distorts not only lending, but entire sectors of the economy. Chinese lending is la-la land and not really based on credit worthiness. Also - lending is all intertwined, public or not. Credit doesn't care where credit comes from, so if this lending bubble is big enough it could cause a recession. And now that China is #1 or #2 sized economy, it would possibly hit everyone.