China’s President Xi Jinping recently met with Maldives President Abdulla Yameen in Beijing, but behind the scenes, the country’s economy is facing a potential financial crash. Market veteran Ruchir Sharma has warned that China’s property bubble, fueled by soaring debts, could lead to a full-blown financial crisis. Sharma highlighted two potential scenarios for the near-term future of China’s economy. In one scenario, the country may experience a series of rebounds, similar to Japan’s “false dawns” in the 1990s. These rebounds could be driven by China’s tech sector, which continues to outperform other leading economies. However, under another scenario, China’s property market could resemble the US real estate market in 2008, leading to a full-blown financial crisis. The property sector, which accounts for a significant portion of China’s GDP, has been burdened by deep debt, with land and home prices falling annually and defaults becoming common. However, Beijing has been hesitant to launch broad economic stimulus, instead implementing smaller support measures that have had limited impact. Sharma believes that a crisis scenario is more probable than a significant bounceback, and regardless of the outcome, China’s next step is likely to be more dramatic than what the consensus expects.