Indeed, China’s slowness to implement an alternative to the investment-led, debt-financed growth model that has prevailed for the last two decades means that its domestic credit risks are the most significant threat to the global economy today. While China may have the financial resources to cover its debt overhang, it risks being left with a low-to-middle-income economy, high debt levels, and nominal growth rates roughly two-thirds lower than the 17% average annual rate achieved in 2004-2011.