China's economic slowdown has been the subject of countless debates, discussions, articles and analyses. While the proposed remedies vary considerably, there seems to be a broad consensus that the illness is structural. But another factor has gone largely unnoticed: the business cycle.

For decades, China's economy sustained double-digit GDP growth, but it wasn't immune to the business cycle: in fact, the six-year slowdown China experienced after the 1997 Asian financial crisis was a symptom of precisely such a cycle.

Today, China's business cycle has led to the accumulation of non-performing loans (NPLs) in the corporate sector, just as it did at the turn of the century. While official data show the rate of NPLs is lower than 2 percent, many economists estimate it is more like 3-5 percent. If they are right, NPLs could amount to 6-7 percent of China's GDP.