When China announced three weeks ago that its economy had grown by 7.1 /cent in the first half of this year, this country appeared to be a lone bright spot during the global recession.

But many economists now worry that too much of China’s growth was fueled by aggressive, state directed lending that could eventually result in a ascendant number of bad loans and mounting government debt.

While banks in the United States and Europe are still languid to make loans because of fears they will not get their money back, Chinese banks issued a record 7.4 trillion yuan, or $1.1 trillion, in loans during the first six months of this year, mostly to big state-owned companies and government infrastructure projects.

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