Actually, they will have their problems to deal with - interbank lending most notably - but I don't think they're going to have too much to worry about. The Western perspective on the Chinese banking system is no doubt rife with a "we do it better" attitude, when most major banks in the USA are leveraged over what they should be, thanks to the dissolving of the barriers to banks doing investment trading and co-mingling funds.
The biggest difference between China and the USA is China will let a bank fail, and the survivors pick up the pieces. This means they lower their systemic risk, instead of papering over it like the USA with TARP and other idiotic "asset relief programs" that merely kick the problem down the road, while increasing the probability of it taking the system down again.
Edit: My mistake, its a trust - not a banking product - the run-down is here:http://www.zerohedge.com/news/2014-01-19/bank-america-actively-preparing-chinese-january-31-trust-defaultThere is concern it will affect the Chinese Yield Curve in addition to some contagion concerns. Still, I think the PBOC will have to let it fail instead of trying to bail it out.
