This study examines the risks on the high corporate debt in China at both the macro and sectoral levels. Corporate debt is concentrated in the sectors prioritized under the investment-led growth model, including utilities, transport, real estate, construction and SOE manufacturing firms. The debt-to-value added ratios are particularly high in utilities and transport. Pockets of vulnerabilities associated with declining profits and debt repayment capacities are surfacing within the mining, real estate sectors and manufacturing SOEs. Smaller banks are more exposed to the riskier sector compare to the large banks. Concerted efforts are needed to curb corporate debt-to-GDP and mitigate sector and financial stability risks. Structural reforms that help increase investment efficiency are most crucial for successful deleveraging.