Chinese leader Xi Jinping, intent on pouring trillions into making China a technological and military superpower, is presiding over a dangerous spiral of debt that is strangling the economy at home and damaging trade partners around the world. Rising debt loads in many countries have spooked investors of late. But few nations have seen a surge more dramatic than China. Last year, China’s credit to the nonfinancial sector—a broad measure of corporate, government and household borrowings—topped 300% of gross domestic product, 60 percentage points higher than at the end of 2019 and now far bigger than in the U.S. It…

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