China's first audit of local government debt found liabilities of 10.7 trillion yuan ($1.7 trillion) at the end of last year and warned of repayment risks, including a reliance on land sales... "Overall it seems manageable but the real question: is anyone going to manage it?" said Vincent Chan, head of China research at Credit Suisse in Hong Kong. "Everyone wants to solve the problem on the condition that the other two parties pay the bill.''

China's banking/debt situation is not a pretty picture. See also China's Debt Situation Not Far Off From Greece: Analyst. Of course such perspectives fail to note that the country has a huge surplus, with which they can smooth over a lot of problems (a distinct luxury Greece, the US, and most of the West do not have).

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