A sharp rise in interest rates or a slowdown in exports could topple this pile of debt back onto China's state-owned banks, forcing time-consuming restructuring that would stop China's construction-heavy economic growth in its tracks. It may not prove as fatal for China as America's housing bust during the Global Financial Crisis, but it would put a big spanner in the works.
Slower Chinese economic growth and financial stress may slow or reverse the stunning growth in demand for New Zealand's tourism, dairy and education exports over the past decade.
China's currency
Trump also pledged to label China as a currency manipulator, which could trigger various trade sanctions and unleash a tit-for-tat trade war New Zealand may have to choose to take sides on.
We have a trade deal with China, but our last remaining hope for one with America (TPPA) was flushed down the dunny on Wednesday night.
Economic stress in China and in its relationship with America is often reflected in a fall in China's yuan against the US dollar and other currencies. That makes China nervous because of the risk Chinese people worried about more devaluation will try to pull money out to put into less risky assets - such as property in the likes of Sydney, Vancouver, London and Auckland.
A big drop in the yuan could force China to introduce capital controls. Big currency movements and controls would disrupt trade and people movements, particularly between New Zealand and China.
European banks
Unlike in 2008 when American banks were falling over because their piles of junk bonds collapsed under the US housing bust, this time European banks are stressed. Many worry in particular about Germany's biggest bank, Deutsche, and how it and others would deal with another period of global financial stress.
Elections in Italy in December, France in May and Germany in October could easily upset the fragile consensus in Europe about keeping the euro and the European Union, given it has plenty of populist politicians wanting to copy Trump's playbook.
Another euro crisis would put the blowtorch to the belly of Europe's most vulnerable banks. That in turn would roil financial markets and make it more expensive and difficult for our banks to roll over the funding they need to back the mortgages they have lent here. That may put upward pressure on mortgage rates here, as has happened to longer fixed rates in recent months.
US interest rates
The biggest move on financial markets on Wednesday night was a 0.2 per cent rise in 10-year US Treasury bond yields to an 11-month high of 2.07 per cent. That's because bond investors fear Trump would carry out his election promises to slash corporate and income taxes while massively increasing Government spending on infrastructure.
That combination is a recipe for US budget deficit blowouts that may rekindle inflation and increase interest rates.
Trump has also suggested he would renegotiate US Treasury debt, just as he renegotiated the junk bonds on his casino. That would trigger a financial armageddon because US Treasury bonds form the foundation of the global financial markets and banking systems.
Treasury yields or interest rates also form the basis of mortgage rates globally, so rising US Treasury yields would also put upward pressure on longer-term mortgage rates here.
Japan's nuclear ambitions
One of Trump's more incendiary suggestions during the campaign was to say Japan could develop nuclear weapons to help defend itself and reduce America's global defence burden.
That would make China very nervous and rachet up tensions in an already tense part of the world that includes North Korea and South Korea. Trump has also hinted South Korea could go nuclear, which would aggravate an unstable and nuclear-armed North Korea.
None of these diplomatic and military tensions would be good for the very integrated North Asian economy, which is now a far bigger driver of the Australian and New Zealand economies than anything happening in Europe and the United States.
