Pedestrians walk through the financial district of Shanghai on October 16, 2013. AFP PHOTO / Peter PARKS
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For global investors and commentators, China remains a fascinating subject and one that carries a health warning.As a result, interbank lending rates have shot up, while five-year bond yields have risen above those of the 10-year sector – both signs of financial tension that reflect the crackdown on leverage.What the taming of China's mighty credit bubble means for the global financial system was very much on the minds of readers who attended an FT event in London this week, which featured George Magnus, an associate at the China Centre at Oxford university. Mr Magnus, who is writing a book about what he describes as the five traps facing China – debt, capital, demographics, middle income and Thucydides – faced an audience looking for insight on these and other topics.When I asked attendees whether they thought China was a bubble, more than half of the 70 people raised a hand.The explosion of credit has been powering China's economy in recent years.
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