China not cradle for crisis

In a recent talk with Business Insider founder Henry Blodget, billionaire commodity guru Jim Rogers said the tremendous debt buildup and unreasonably high asset valuations have made the global economy even more vulnerable than it was in 2008, and that the next crash will be "the biggest in his lifetime".

"China could easily end up being the cradle where the next crisis is nurtured, thanks to the explosive debt growth seen in the world's second-largest economy since the (global financial) crisis," Rogers said, citing Goldman Sachs estimate last year that China's real debt is 250 percent of its GDP.

Putting aside the inaccuracy of Goldman Sachs' estimate, China has distinct differences from the United States in terms of its debt composition. The majority of China's debts have been used for infrastructure construction and technological improvements for domestic enterprises' transformation and upgrading, meaning its accumulated debts are mostly recyclable, reusable high-grade assets. The debts in the US, on the other hand, have been accumulated to fill up spending gaps, not expand production.