- China's stock of bank credit is 137% the size of of Private Sector GDP; this might be a new sovereign analysis metric to look at and I like how they use Private Sector GDP instead of just official GDP which I think is a better indicator of economic health.
- Shadow banking has shot up by 73 percentage points since 2008.
- China's local government debt, which even back in 2011 severely underestimated actual debt levels, which has increased the rest for local default.
- Decreased fiscal revenue.
- And the opaqueness in regards to debt from corporations that are linked to local governments.
What also needs to be remembered is that, while a downgrade from AA- to A+ doesn't seem like a major deal, the ratings agency also only downgraded the United States from AAA to AA+ back in 2011; and how many individuals think that a nation with debts in excess of its GDP is really a AA+ debt risk? In my mind, knowing how reluctant ratings agencies are to actually list a countries actual debt rating according to sound judgement of the data, any sort of downgrade should be considered as a big deal.