They have invested a huge amount of capital in manufacturing capacity (cars in particular), so much that their total capacity is equal to about half of the entire rest of the world put together. The problem is that they do not have the domestic demand to fully consume this supply. If the rest of the world opts at any point to put up trade barriers and prevent Chinese manufactured goods from being imported, China will wind up with billions of dollars in capital stranded in these investments. That could cause a financial crisis or an economic environment similar to Japan’s lost decade.