This is John Batster, a conversation with my good colleague Chris Regal of Scala.com about China's problems,

deflation, housing, crater, manufacturing orders off.

However, what we look at right now is China's credit overhang is vast, bigger

than anyone could guess. Chris speaks to what China needed earlier in the cycle, but now unknown.

The question is, is there any way to pull out of this?

Are we looking at Japanification or worse, decades of no

growth and shrinkage or worse? Unknown. Here's Chris Wiegel on the Troubles in China vast.

Why? Chinese Communist Party is a contributor to these problems.

The Chinese Communist Party is not said to be the answer, but that's another day.

Here's Chris.

John when Mr. She was in San Francisco last year.

The ask was for immediately between five and seven trillion to bail out the Chinese economy with the speculation that in reality you needed about 20 trillion US dollars to write the Chinese ship.

China is facing a huge liquidity crunch with bad

loans with more and more failures in the property sector. The challenge that the Chinese government,

both central and Regional, is

liquidity. You're starting to see that in unpaid civil servants, unpaid tax refunds, and

other things. China is constricting and does not have the internal capital to be able to fix that problem with the

rest of the world slowing economically and China being the manufacturing center

for the world unless you see orders uptake and liquidity regain China is starting at that spiral.