This article looks at the current debt crisis that China is facing. Their debt has reached about 250% of their GDP, up from 150% six years ago. The reason there has been such a large spike in debt since 2008 was because of their stimulus package that they implemented after the 2008 financial crisis. China's total debt-to-GDP ratio increased faster than any other big country during that time. What many are afraid of is that their economy will have a sudden drop off and decline, however, they say that the same thing that got China so deep into debt is what keeps it from blowing up: state control of the financial system and the perception, often substantiated, of government backing for debts. What needs to happen is the government needs to let failing companies fail. Also authorities could make banks and investors allocate their capital much more carefully, therefore slowing the rise in China's debt.
I think that there should be some government intervention to help with certain companies, but clearly China is way too dependent on their government and needs to let some of their companies fail, in order to decrease their debt.
http://www.economist.com/news/finance-and-economics/21625823-rein-its-debt-china-must-be-willing-let-companies-fail-moral-deficit
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