"There is just no way to grow out of a debt problem when credit is already twice as large as GDP and growing nearly twice as fast," Chu said.

Chu's view puts her in a minority among those charting the future of the world's biggest nation. She questions how long China can maintain growth through bank lending that has allowed its economy to sidestep the global financial crisis.

Fitch's sovereign-debt downgrade to A-plus, the fifth-highest level, has sparked a debate in which Chu's calculations have been called "biased" by one economist and a "misinterpretation" by a stockbroker.

Her views have struck a nerve. "Everyone is talking about credit - about the credit cycle, leverage and credit-quality problems," said Stephen Green, the head of greater China research at Standard Chartered in Hong Kong, adding that there was not enough good data available. "It's a big black box, and it's quite scary."

Amid the global credit crunch of 2008, Beijing ramped up lending by state-controlled banks to prevent an economic slowdown. The assets of banks expanded by 71 trillion yuan (HK$90 trillion) in the past four years, according to government data.

They might increase by as much as 20 trillion yuan this year, Chu said. That will exceed the US$13.4 trillion of assets held by US commercial banks at the end of last year, according to the Federal Deposit Insurance Corp.

Expansion of credit has not caused a surge in the proportion of bad loans, data from the banking regulator shows. While loans overdue for at least three months grew for six consecutive quarters to 526.5 billion yuan at the end of March, the ratio of non-performing loans fell to 0.96 per cent from 2.42 per cent at the end of 2008.

Chu said these figures were distorted. The ratio of non-performing loans to total lending had declined mainly because credit had surged. The data also did not reflect the real amount of debt because of the ways banks moved loans off their books.