Govt (state/public) solvency is just one part of the total debt of the nationstate. The nation has households/individuals and corporations.
W.r.t PRC, corporate debt is approaching 150% of GDP, and there is a large component of NBFC (shadow finance, outside banking) not found to same degree in developed countries that will be a minefield if exposed more by whatever trajectory/pressure that continues to develop in PRC now.
Especially given market cap % of GDP (i.e a more diverse equity spread) is as low as it is now in PRC after the 6 Trillion wiped out there in a few short years.
Then a lot of the household debt (60% of GDP) is leveraged on real estate (rather than say stocks, pensions, funds etc), a sector showing major signs of ponzi bubble bursting already (pushing significant deflation and all) for number of reasons A problem given real estate relative non-liquidity and that too the particular (oversupply) conditions found in PRC at same time that are strange problem with strange particular genesis in PRC.
A summary:
A stumbling Chinese economy can be a major drag on world aggregate demand.
www.aei.org
The more the gross debt level is and the more stressed it is, the less room for the govt to take on more debt itself whatever its credit rating (in fact expansion in these conditions rather than relative status quo will affect its rating).
There is only so much qualitative + liquid total wealth in end during a snapshot and relative short and mid term trajectory on offer.
Other countries are different and have different problems, those are different subjects.
South Korea for example has far larger wealth/capita (and this is not leveraged at say 300% debt level like PRC already has right now at its lower wealth setting).....and India doesn't have a TFR <1.0 problem to have to manage in its fiscal/total debt/wealth space like PRC does.
The issue that is often overlooked in the end by folks like
@GoMig-21 is the heavyset absolutist statism creating a problem (with objective of some problem at hand it prioritizes for whatever reason, malthusian, centralist marxist or otherwise) and then trying to respond to it with same heavy set statist lever....which ends up being superficial to the long term blackpilling of the larger dissonance this grows with society (and the way to reconcile trust and authority with far greater resolution between state and society to begin with)....as there are simply few to no intermediary and hedged relevant institutions outside of the statist complex/psyche to handle these matters.
The CCP has been deadset against the greater political resolution approach (given what this means for the CCP, especially with backlog of accountability on significant statist crimes on society), and the costs mount.
A look at just one aspect of this:
@j_hungary