Next year is shaping up to be a decisive one for China's economy. In the eight years since the global financial crisis struck, the vitality and importance of low-cost exports -- the kind the Chinese economy used to rely on -- have steadily declined. Scrambling to prop up the country's growth and protect its near-universal employment, China's leaders have embraced monetary and fiscal stimulus measures with open arms, causing the country's outstanding debt to balloon to almost 250 percent of gross domestic product. Corporate debt, by far the largest share of China's total debt, has likewise surged by more than 60 percent to top 165 percent of GDP. Now, a nationwide debt crisis looms at Beijing's doorstep amid business defaults and bankruptcies, low industrial profits, winnowing returns on investment and the very real prospect of yet another slowdown in the real estate sector. How well Beijing manages these problems in...
