China is attempting to slow its economy to minimize inflation and the risks of a property bubble, and to improve the underwriting practices and solvency of its banks.
The debate about China involves questions of a soft landing or a hard landing as the result of government efforts, and the impact on China of signs of moderating world economic growth.
New credit rating agency actions with respect to Greece and Portugal today, following the statements by Standard and Poor's yesterday, escalate concerns about a credit event that could trigger credit default swap contracts and impair the banking system in Europe, with consequential follow-on impacts to banking globally.
European sovereign credit risks have a time frame of days or weeks for a market event (as well as long-term lingering risks of subsequent market impact). China's banking issues have a longer time horizon, probably on the order of quarters and possibly years for a market event.