Australia has been living off the Chinese genie that escaped from the bottle around 2000 and recreated itself as an economic super power.

It triggered a mining boom, boosted government coffers and stacked our universities with willing students.

There have been rumblings that all isn’t well in China for a long time. On Wednesday those rumblings came to the surface when ratings agency Moodys took its credit rating down a notch to A1 from Aa3.

That mightn’t sound too dramatic, but it was the first time since the Tiananmen Square protests in 1989 that Moodys had taken the knife to the Chinese growth story.

The reason is debt, and it “reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows”.

That’s ratings-agency-speak for what respected economist Saul Eslake said is “the recognition of a significant increase in risk because there’s an awful lot of debt in China”.

China’s debt amounts to 256 per cent of GDP, Mr Eslake told The New Daily, about the same as the United States and above Australia’s 246 per cent.

But the structure of the debt is what worries some. The country’s informal or “shadow” bank sector has been boosted in recent times, and it’s an opaque and risky world, Mr Eslake said.

So does all this mean that China is about to fall in a hole?

“It probably won’t weaken significantly,” he said.

But the continuation of a slow decline will be felt in Australia because we have become so dependent on its growth, he added.

Let’s look at some of the figures. China is our number-one trading partner, accounting for 22.7 per cent of our trade relations with the world, double what it was in 1995. It accounted for 27.5 per cent of our overall exports and 15.6 per cent of our service exports in 2015-16.

Most of those China-bound exports are in two areas: minerals and education. China saved our economic bacon earlier this year by pushing iron ore prices up from early 2016 lows and boosting government coffers with unexpected demand. If Chinese demand falls again, so does the national budget.

Education exports, or Chinese students at Australian universities, are also huge. In 2016 education exports grew a massive 17 per cent to $21.8 billion, with Chinese students accounting for 27 per cent of the market.

Chinese economic weakness will slow that flow and hit uni budgets hard.

Then there’s property. While concerns about affordability have seen government restricting foreign investment, there has been an upside, as foreign money has financed much new construction.

That tide looks like it is going out, with Treasury secretary John Fraser reporting a steep fall in foreign investment applications since the Chinese government moved last year to slow capital outflows and reduce credit availability.

Foreign investment applications for residential housing in Australia totalled 40,000 last financial year, Mr Fraser said on Wednesday. But this year the number was expected to fall more than 60 per cent to about 15,000, he said, “partly reflecting” the change in Chinese credit markets.

So strong has Chinese demand for property been that Chinese purchases equated to 25 per cent of new supply in New South Wales and 16 per cent in Victoria in the last year, according to new research from Credit Suisse.

But now there are worries that as many as 80 per cent of recent sales will not be completed due to the nation’s economic slowdown, the ABC reported.

Along with moves from China, the 2017 budget cut the foreign-buyer quota for new apartment buildings from 100 per cent to 50 per cent.

Angie Zigomanis, property analyst at BIS Oxford Economics, said that will “delay the next round of construction”.

That in turn will cut construction jobs and tax takes, he said.