Jack in Maryland

The Next Credit Crisis Will Originate in China

Big question:

Some others have said, similar to comments here, that most of the non-performing loans at Chinese banks are cases where one Chinese State entity owes money to another, which can therefore be resolved with the stroke of a pen in a totalitarian society. And that hence, the apparent liability is eminently fixable.

Or will actual money have to be used to clear the balance sheet, the way it will IF the US government honors its Social Security commitments?