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The issue is the China's corporate debt and off book debt to government owned / backed companies. They have $3.12T coming due in the next year. For example: h

• chewz 8y ago
  > Designed to handle 320 trains a day, the Lanzhou-Xinjiang HSR currently has only eight daily services. “Because of this large amount of idle capacity, [the line’s] annual revenues are not enough to pay for its electricity costs,” said Prof Zhao. https://www.ft.com/content/ca28f58a-955d-11e8-b747-fb1e803ee64e https://www.ft.com/content/ca28f58a-955d-11e8-b747-fb1e803ee... [Paywall] > China’s huge leveraged bet on HSR has also generated many other benefits as it dramatically shrinks distances, transforms lives and boosts regional economies. The now three-hour, 1,100km train ride between Guangzhou and Wuhan used to take 11 hours, and tickets are now priced at just Rmb464. Annual travel on China’s HSR lines — 1.7bn trips — exceeds travel on conventional rail services. And about half of all HSR trips are, like Mr Liu’s, business-related. “When you think about that, a staggering 850m people are travelling [on HSR] to meet customers, get to their job, visit research centres and so on,” said Mr Ollivier. If China Railway’s HSR network is ultimately able to pay for itself, it will be a testament to the miracles that can happen when the Chinese Communist party marshals the vast financial resources at its disposal to serve a common good. But if it cannot, there is little doubt who will have to make up the difference. “China Railway’s debt is government-backed,” said Prof Li. “It won’t default.”