In this video clip at Asia Society in New York on December 15, Kevin Rudd (L) and Ruchir Sharma debate the likelihood of a Chinese recession (4 min., 35. sec)

The next global recession could be “made in China,” according to Ruchir Sharma, head of Emerging Markets and Global Macro at Morgan Stanley Investment Management.

Speaking at Asia Society in New York on Tuesday alongside a panel of political and economic experts, each offering predictions for the Asia-Pacific in the coming year, Sharma said that China is now big enough to have a serious economic effect on the global economy. “Until the last decade there was no other economy that could cause a global recession, apart from the United States,” Sharma said. “What’s changed in the last few years is that China has become a big economy … it’s an idea that the world isn’t used to.”

Sharma pointed to China’s debt woes as the chief factor driving his prediction. Until 2008, he noted, the country was relatively stable in this regard. But in the wake of the Global Financial Crisis, it took on “far too much” debt. It’s “the largest amount of debt that any developing country in history has ever taken,” he said. “And the consistent predictor of financial crisis and economic troubles in the world has always been if a country takes on too much debt in a short amount of time.”

Eurasia Group President Ian Bremmer said this prediction may be overblown, given that the Chinese government has “an enormous amount of political influence” over the economy. “They’re state capitalist,” Bremmer said. “You can’t short the Chinese market.”

Asia Society Policy Institute President Kevin Rudd also disagreed with the idea that China would be the source of the next global recession. “I think there are ample existing challenges that have got little to do with China at present,” he said, listing as examples the “appalling” state of global trade and the disruption that new technology is having on the workforce.

The panelists agreed that China’s officially stated 7 percent growth rate isn't likely an accurate figure, estimating that it’s probably only growing by somewhere between 4 and 6 percent. Rudd said that 6 percent growth is what the Chinese government regards as the bottom line for maintaining social and political stability, and with measures including relaxing monetary policy and reinvesting in infrastructure, the country can maintain that mark.

Sharma countered that not one country with a declining working age population, as China is now experiencing, has ever maintained 6 percent growth. Rudd retorted that China has a counterpoint to that trend in its 100 million people in the countryside who are still “radically underemployed” and “haven’t effectively entered the workforce.”

Rudd added that, in spite of manufacturing slowdowns, there’s “an explosion” in the services sector, large increases in private domestic consumption, and many positive structural changes in the economy. He did concede, however, that “it ain’t smooth sailing” for the country.

Watch Rudd and Sharma debate the likelihood of a Chinese recession in the above video clip. Watch the complete program in the video below.

In this video at Asia Society in New York on December 15, (L to R) Ian Bremmer, Josette Sheeran, Tom Nagorski, Kevin Rudd, and Ruchir Sharma predict what will happen in Asia in 2016. (1 hr., 21. min)