Daiwa Securities has forecast Armageddon. They say that over-investment in China in recent years has created a debt bubble so great that Chinese authorities would not able to manage its collapse, resulting in a debt deflationary spiral which would make 2008 look like a walk in the park. Such a meltdown would, in their words, "send the global economy into a tailspin".But they also outline another scenario, in which China's economy undergoes a nasty, possibly prolonged recession, from which it will emerge with lower growth.Which of these scenarios will play out? Well, as I discuss in my latest Forbes post, it really depends what Chinese authorities do. They insist that "everything is under control". But are they actually in the wrong trousers?Read my analysis and conclusions here China's economy: no collapse, but it's serious and so are the politics - George Magnus If we don't understand both sides of China's balance sheet we understand neither - Michael PettisOther Forbes posts on China: Quantitative tightening is a myth (but that doesn't mean there isn't a problem)