Things are not looking good. China is struggling to deal with a host of new problems. So much of the asset value has been diverted to debt collateral, and that collateral is also secured by multi-layers of debt and debt financed collateral. This is the same madness that resulted in the USA derivative debacle.
Big SOE, ACo, invests in SmallCo, a new companies (Step1). Management of A structure the deals so as to take a chunk of ownership (stock) in SmallCo in return for bringing in the financing. ACo hugely over pays for this SmallCo stock and this overvalued asset is on ACo's balance sheet. ACo then goes to the bank and gets a loan that is 90% collateralized with SmallCo's stock. The cash from the new loan is used to buy more SmallCo stock (Step 2) but this stock is not newly issued stock. ACo buys stock owned by its managers at hugely overvalued prices which increases the previous asset value (Step 1) and adds more (Step 2) asset value while, in fact, the real value, CASH, ends up in the pockets of ACo's managers. Do this thousands of times in many various companies in all sorts of industries without transparency, without honest audits and all dependent on political connections, you get a phony valuation of assets and a few overly rich people whose wealth is based primarily on the ability to pass the bank's money into their own politically connected pockets.
Then, when it is clear the bank made loans and underlying collateral is worthless, the gumbment bails out the banks. First, reserve requirements are lowered. In the face of NPLs, Non-Performing Loans, this allows banks to loan more money but does not require recognition of fallen asset values. Second, cash is loaned, given, to banks by increasing liquidity and lower interest rates. Banks gain further protection when trading in stocks is suspended because if you can't sell the stock you bought at hugely overvalued prices at a loss, you don't need to mark your asset values down.
The gumbment's actions at best only delay the slide and allows those with the money to move, hide and export their wealth. As Adam Smith taught us; we all act in our own self-interest so the connected actors continue to get richer while the drama rolls on.
As the gumbment owns the banks, and controls just about everything, it is the people that end up losing their savings. Or, the gumbment can resort to the printing press as paying back loans with cheap money always works. Unfortunately, the people's incomes rarely rise as fast as their currency falls.
None of this is new to the world. Nothing except, perhaps, then number of people who will be hurt. China has, if you haven't noticed, a lot of people and few of them own Porsches, Lamborghinis or mansions in Vancouver or San Marino.