Are the chickens of bad loans finally coming home to roost in China? It does certainly look like it. The latest sign that something could be wrong came yesterday when Chinese stocks fell 5.3% on news of a credit crunch. Clearly, the incident brought back memories of the US banking crisis of 2007 and 2008. However, if noted investor Mark Mobius is to be believed, the similarity ends right there. As per Mobius, the Chinese Government controls the country's banks. And thus it will be much easier for China to bail its banks out. Besides, China is the owner of the world's largest stock of currency reserves, a neat US$ 3 trillion. It can therefore bring this to use as and when it decides to recapitalize its banking system. While we agree with Mobius, we are of the view that days of 9%-10% GDP growth seem to be over for China. As a result of the overhang of the bad loans and the exports driven structure of its economy, long term sustainable growth could come in much lower for China henceforth.