Are you referring to the debt/GDP ratio being lower than Japan's, and therefore China has room to grow? Although that statistic is important, it's not the end-all measurement, by far. Some major differences between China/Japan:
1. China literally puts out bullsh!t data. The sum of China's provincial GDP is greater than the reported GDP of China by the error margin of 1 FULL PROVINCE. China's GDP was 6.7% growth, but somehow, 24 of 28 provincial regions reported > 6.7% GDP growth, with the lowest at 6.2% GDP growth.
2. Chinese housing is much more expensive comparatively (per function of wage) than US or Japan. 70% of China's household assets are tied to a house. Real estate is also 15% of total GDP and 20% of all bank loans. This paints a worrisome picture when it comes to a housing bubble being burst, compared to Japan.
3. Japanese debt is in much higher demand than Chinese, at a global scale. Global investors actually want to buy it (for the time being) as it is considered "safe".
4. Japanese corporate debt is much healthier than Chinese. 46% of Chinese companies are taking new loans to repay old loans. 16% of China's top 1000 companies can't even make the INTEREST ONLY payment on their loans. In contrast, Japanese companies are paying back their loans. Which is a key reason why Japanese debt is worth more.
5. Japan has a tightly regulated banking environment. This is compared to China's giant shadow banking market.
6. China has a massive problem with SoE (State owned Enterprises). They are inefficient and are being propped up by either local or national government. There are talks of restructuring with job losses in the millions.
Some sources
http://www.zerohedge.com/news/2016-...-provinces-report-higher-gdp-national-average
https://www.project-syndicate.org/commentary/china-corporate-debt-problem-by-david-lipton-2016-08
http://www.businessinsider.com/goldman-sachs-china-debt-ponzi-stage-2016-7
http://www.theepochtimes.com/n3/2134526-is-the-china-corporate-debt-bubble-finally-popping/
http://www.forbes.com/sites/wadeshe...housing-market-refuses-to-crash/#42dd32ac720b
https://www.bloomberg.com/view/articles/2016-09-15/china-s-housing-gets-scarily-expensive
http://www.bloomberg.com/news/artic...h-worries-about-china-s-shadow-banking-system