China Youth Daily published an article, which was later republished, listing a number of warnings about the effect the U.S. debt crisis has on China:
First, the U.S. debt ceiling dispute once again warns China not to put its debt investments in one basket or excessively concentrate on one financial product.
Second, China’s local government debt crisis is far more worrisome than the U.S. national debt crisis. An audit notice in June  showed that 36 local governments had a total debt balance that neared 3.85 trillion yuan; 16 regions had a ratio of debt to GDP that exceeded 100 percent. The highest debt ratio was as high as 219 percent. The region with the highest debt ratio was concentrated in the Yangtze River Delta region (Shanghai municipality and Jiangsu and Zhejiang Provinces). Their overall debt ratio was over 200 percent, without even including the local government’s debt from its implicit guarantee.
Although the risk of a U.S. Treasury default is worrisome, it at least lets people know where the danger is. However, the debts of China’s local governments are a big mess. If the U.S. Treasury were a person forced to the edge of a cliff, at least he could see clearly that if he walked forward any further, he would fall down. Thus he could stop himself on time. Chinese local governments with debt are facing away from the cliff. They cannot see how far away the cliff is. This is much more frightening.
Third, the governments’ budgets must be open and transparent and they must accept being monitored by the National People’s Congress.
Source: China Youth Daily, October 16, 2013