Zhang Monan alarmed the Chinese public debt problem in the PS. While technical details may need to be revisited (for instance, she argues that revenues account for 6 percent of the sovereign asset; theoretically speaking, this should be the present value of future revenues), I agree with her key message.
Ms. Monan argues that simply comparing the aggregate levels of assets and liabilities do not deliver a right message about the Chinese sovereign debt risk: if the assets are not liquid enough, liquidity shortage (she writes "short-term solvency" but it should be interpreted as "liquidity") could be a real possibility. This statement is relevant, given too many economists look at either net or gross debt level in terms of GDP only, which is misleading. The maturity, investor base, and instruments matter. We all know that.
I wish she applied this perspective to corporate debt story as well. Although the high leverage of the non financial corporate sector is already worrisome, it would be interesting should there be more granular discussion on the asset and liability structures (e.g., instruments and maturity structure, among others.), which could aggravate the problem.
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