China's Detroit?

A reminder that the sometimes hysterical fears (or even perverse admiration for their central planning) some people have of China's rapid ascent are not based on reality. China has many massive hurdles to overcome on its way to becoming a superpower (ABS-CBN):

Many of the province's mainstay industries, including shipbuilding and the manufacturer of solar panels, are drowning in overcapacity. Profits are dwindling, and the government's tax growth is braking hard.

That leaves Jiangsu vulnerable as President Xi Jinping and Premier Li Keqiang slow the country's giant economy to push through reforms aimed at reducing its reliance on the massive investment that made the country the factory to the world in favour of more services- and consumption-led growth.

As part of that, Beijing has ordered a clamp down on provincial government borrowing and land sales, the mainstay income for many local administrations. But equally, Beijing expects local governments to absorb much of the cost of downsizing many industries, leaving provinces like Jiangsu caught between a rock and a hard place.

Standard Chartered, Fitch and Credit Suisse have estimated local government debt in China at the equivalent of anywhere between 15 percent and 36 percent of the country's output, or as much as $3 trillion based on World Bank GDP figures for 2012.