Monday's Citi report estimated that the debt reduction peak will increase China's debt ratio by 12.3 percentage points to 274.5 percent by the end of the year, reversing a slight decline in 2017.
"Markets are right, in our view, more concerned about the sustainability of Chinese debt and the increased financial risks," said Citi.
Andrew Collier, Managing Director of Orient Capital Research in Hong Kong, said there is likely to be "leakage." In China's debt economy – which means that those in need of a loan will find a way to get through the shadow banking system
"So I am not optimistic that there will be significant debt reduction in 201
"At some point you will have a defaulting situation in different parts of the US system," he said.
Col Lier highlighted the possibility of city government failures, which he described as "more or less unknown in China
Ray Heung, senior vice president of the Financial Institutions Group at Moody's Investors Service, said Chinese Reg It will continue to support the banking system, which focuses on larger banks – but smaller ones that have a relationship with a local government or play a social role.
"We believe that one of the paramount factors is actually social stability in China," Heung told reporters on October 10.