I believe most of the debt is owed internally. Kind of like the Fed is in debt, they just create the money out of nothing.

I could be wrong, but as far as I know, China does not owe a lot of debt to external creditors (like the US does). Some individual Chinese corporations might but I doubt if it is a significant portion of the total debt stated. I believe it is mostly printing press money created from nothing and loaned out into the economy. So I guess you could say "they owe it to themselves". So from the current generally accepted economic point of view, it should not be a problem.

Personally, I don't think it will end well.

John