One of the more significant questions of the last few years is why China has not seen its own credit induced bubble implosion. Lack of modesty with respect to the size of said bubble certainly isn’t the reason as they have borrowed and spent some 25 Trillion Dollars. In fact, this figure closes on 30 Trillion at present a figure nearly double the size of our credit bubble despite a considerably smaller economy. In effect, Chinese leverage or debt ratios make those seen in North America and Europe some 10-years ago look amateurish in comparison, and yet no bust. Much of the reason for this can be found in the large numbers of significant state owned enterprises in China and of course the state run dominant economic paradigm of “your wish is my command”. That said history is very clear on the consequences of record debt bubbles, they inevitably implode.