It's possible to do a financial engineering restructuring using some of those enormous assets. Government debt levels are still quite low. The government has time because financial agents can't take their money out and shift it to Singapore or Hong Kong. Financial markets are not integrated, but they are integrating. With unemployment rising in cities, the last thing you want to do is force banks to close enterprises.
China has some time here especially if world conditions continue to be as robust as they are.
But there is this tension between reforms to make the system viable over the medium term, on the one hand, and short-term macroeconomic objectives on the other. China has to manage this. This is why growth is so important. China has to grow to be able to reform, and to reform to be able to grow. All Rights Reserved.