When financial crisis devastated its Asian neighbors a decade ago, China sat safely on the sidelines, its own markets and banks largely closed off from the world and insulated from the upheavals wracking more open economies.

But today, China could be ripe for a crisis of its own that might resemble the collapse of Japan’s “Bubble Economy” in the early 1990s — and have enormous global impact, analysts warn.

Just as in Japan at that time, stock and property prices here are soaring. Banks have lent billions to build malls, office towers and apartment buildings — although many remain unfilled.

Authorities warn the economy may be overheating and are taking steps to cool investment and lending, but to little avail. An attempt in late May to rein in surging stock prices sent shares tumbling for a couple of days before they resumed their climb.

The likely trigger of a crisis, should it erupt, would be a pile-up of bad loans in a weak banking system, analysts say.

“The banking system is still based on collateral and the collateral is all overvalued,” says Andy Xie, an independent economist based in Shanghai and Hong Kong.

“If the bubble bursts, then you will have a banking crisis like Japan in 1990,” he says. “The question is how China can manage after the bubble.”

Given China’s growing role in global manufacturing, financial markets and commodities, the repercussions of such a collapse would be far-reaching.

While there are differences between Japan’s asset price bubble and China’s situation today, the similarities are instructive.