CHINA’S “trust companies” are a growth industry, notable not for imparting stability to the country’s $9.2 trillion (R98 trillion) economy, but for the red flags they raise.

One figure stands out: the $343 billion these non-bank lenders owe in interest and principal repayments this quarter alone. This topic may not sound very exciting to those far removed from the mechanics of China Incorporated and President Xi Jinping’s efforts to rein in credit and investment bubbles.

But these non-bank lenders are at the core of the shadow banking industry that makes China’s financial system both opaque and fragile. The greater the repayment requirements, the greater the risk of a miss and the turmoil that might follow. That’s why the latest report from Hu Yifan of Haitong International Securities, titled “Day of Reckoning for China Trusts”, is so troubling.

From now through to next year, Hu says, such repayments will be at elevated levels. The odds on missed payments and headline-making credit events are increasing as data suggest government stimulus measures are gaining less traction than in years past.

“The brisk development of trust funds is leading to a dead end,” Hu says.

The “uncertainties surrounding their regulatory requirements have led to an accumulation and concentration of risk in this sector”. And even as Chinese regulators try to curb their indebtedness, trust companies find new ways to expand.

This “liquidity binge”, Hu says, is fuelling excessive leverage and risk in property, infrastructure and mining. “Current payment difficulties of trust funds are only the tip of the iceberg,” he warns.

The reference is to the part of the problem we can see. What worries outside observers, including the International Monetary Fund (IMF), is what we cannot see. At the top of any wish list for economists in Washington is discerning China’s true debt profile – national, local and financial.

Until we know for sure, if we even can, the IMF can do little more than urge China to address its “web of vulnerabilities” inherent in its credit- and investment-fuelled growth.

Hu’s iceberg comment has me thinking back to Bill Gross’s oft-quoted China analogy about “mystery meat”.

“Nobody knows what’s there and there’s a little bit of bologna,” the bond fund manager said in a February 4 interview. “So we’re just going to have to wonder going forward through this year as to the potential problems in China and other emerging markets.”

Make that next year, too. The lack of transparency that pervades Beijing makes it harder to know which of Xi’s planned reforms are being carried out and which are not.

China’s grow-fast-at-any-cost ethos, rampant corruption and the lack of a free press conspire to make the second-biggest economy more of a black box than investors like Gross and policymakers at the IMF would prefer.

The IMF worries China faces a “hard landing” unless it makes progress in “transitioning to a safer and more sustainable growth path.”

As Hu points out, troubles in the trust industry could be a harbinger of something bigger and much more traumatic.

It may all come down to that $343bn.

William Pesek is a Bloomberg columnist. These views are his own.