My guess is that the Chinese authorities, like everybody else, were caught by surprise at the suddenness of the downturn. But they have since reacted with great speed and vigour in implementing monetary and fiscal measures to stimulate their economy. There are some signs that these measures are starting to work.
I find it inconceivable that average real lending rates of this magnitude are sustainable over the long term, because most private sector businesses will not generate sufficiently high real returns to enable them to service their debt.