A worse scenario for China is also possible, however. It is the path of 1990s Japan, which tried to avoid pain at any cost after rising debts led to the collapse of its property and stock market bubbles. Rather than take steps to slow lending growth, or to force banks to recognize and clean up bad loans, Japan bailed out troubled borrowers and covered bad loans with new loans. This daisy chain of bailouts was supported by the keiretsu, large conglomerates like Mitsubishi and Mitsui that were built around one bank, whose officials often felt personally obligated to keep their various
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