(Backgrounder: Temasek has biggish stakes in three out of the four major Chinese banks: doesn’t have shares in Agricultural Bank and CapLand is big and bullish on China).
Credit issues in Pearl Estuary region: http://blogs.reuters.com/breakingviews/2013/03/27/chinese-credit-alarms-sound-in-the-east/
And New rules will force mainstream lenders to cap their exposure to some of the riskier off-balance sheet products they have sold to customers – in particular, those that are effectively repackaged corporate debt. That limits a big source of risk for banks, but creates a new one for the Chinese economy.
http://blogs.reuters.com/breakingviews/2013/03/28/china-shadow-bank-curbs-attack-symptom-not-cause/
The junk bond market in China took off this year. Although the deals still account for a small share of the global total, Chinese companies have sold $8 billion of high-yield bonds to overseas investors since January. That’s up from $2.3 billion during the same period a year earlier, according to figures from Dealogic … the Chinese market has its own set of potential problems, and some analysts worry that investors aren’t being properly compensated for the added layer of risks.
he bulk of the high-yield bonds in Asia this year — roughly half — come from Chinese real estate companies. The fear is that the housing market, which has been booming, is a bubble that will eventually burst.
Mainland China’s domestic bond market remains largely off limits to foreign buyers. So most investors buy offshore Chinese bonds, which are issued through holding companies headquartered in places like the Cayman Islands.
The bonds tend not to be backed by the actual businesses and underlying assets in mainland China. That means foreign bondholders may have little legal recourse if a company defaults on its debt, especially if local banks or other Chinese creditors make claims.
Bondholders are now facing such difficulties with the bankruptcy of Suntech Power.
Thoughts of a Cynical Investor 
The IMF’s Il Houng Lee, Murtaza Syed, and Liu Xueyan have published a very interesting and widely noticed study called “Is China Over-Investing and Does it Matter?” In it they argue that there is strong evidence that China is overinvesting significantly.
The biggest problem with all these arguments is that it relies on China’s official statistics. This country has perhaps the most unreliable statistics in modern economic history. What is considering consumption, investment, etc are all over the map. There is also evidence indicating that many activities are not captured in the official data. Anyone who thinks they really know what is going on (regardless of bullish or bearish arguments) is just fooling themselves as it is nothing but academic exercise. Not even god knows what is actually going on.
From my personal experience,being a good pupil of our MM Lee KY,CCP will definitely make sure that China’s official statistics are all geared to serve the motherland meaning members of CCP.