Sounds bad, and in a free-market it would be (and it would never have been allowed to get so high)
But in China, the Gov’t owns the banks. No one knows how much bad debt they have. The banks can just sit on it forever and get cash injections from the bank (just like TARP!). Capital controls are closed, so no will crash the RMB and money won’t be allowed to leave (at least not quickly)
So rather than burst/crash, they will go through a decades-long, slow unwinding, just like Japan and their property debt bubble.
I thought I read on one of these stories...like the humongous malls and entire cities that are vacant over there, that GDP is tied to the money spent on the construction. So build a lot of what no one can afford or want and you prop up the GDP and look like you are going strong? That is one big bubble over there.