###Earlier this week, the IMF issued a warning about the growing level of debt in China following its annual report of the financial standing of the country. Although generally positive, the report says that the level of debt which now stands at 230% of GDP is in dangerous territory. There are of course implications for trade between China and the rest of the world but there may be an unforeseen consequence for shipping that could see the current wave of consolidations in, for example, the liner sector undermined. It was already announced in July that China will be converting all large state-owned enterprises into limited liability firms or joint-stock firms by the end of this year. The Chinese government said that the restructuring will help the firms to set up flexible and market-based operating mechanisms. All quite innocuous perhaps but a similar situation occurred when the former Soviet Union began unravelling. When that happened, the central control over shipping companies ended and many of them ended up in private hands. Some collapsed and the ships sold off to the highest bidder. Having merged its two major shipping companies into one, any break up or sale of China’s shipping assets could see the start of a number of smaller private companies that would reverse the consolidation trend of the last couple of years. It is of course only a possibility at the present but one which could very easily happen.