No country can be indifferent to China's economy, especially not Australia. We're more exposed to what goes on in it than just about any other nation. China has long been the biggest market for our commodities, such as iron ore, coal and wool. And now it is the largest foreign buyer of our services, especially education and tourism. The upshot? Many thousands of Australian jobs depend on the health of the Chinese economy.

Big Asian economies in our region – China, India and Indonesia – are bound to become even more important to us during this, the Asian Century. Our politicians like to dwell on the opportunities presented by the historic economic transformation to our north. But we'll also need to be prepared for some nasty bumps along the way.

The aftermath of China's enormous corporate debt bubble could well be one of them. For some years now China's economic growth has been underpinned by an explosion in corporate lending. China has accounted for half – yes half – of all new credit created globally since 2005 according to the New York Federal Reserve. That's a huge share for an economy that now only accounts for about 15 per cent of the global economy.

Alarm bells rang last August when the International Monetary Fund pointed out the trajectory of credit growth in China was eerily similar to countries that experienced painful post-debt boom adjustments in the recent past. This includes Japan in the 1980s, Thailand prior to Asian Financial Crisis and Spain prior to the European debt crisis.