Is China’s Crash Near?

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China is still trying to get its bubblicious economy under control:

China staged its third interest rate increase since October on Tuesday, the latest sign of the authorities’ intensifying efforts to temper the blistering pace of economic growth and prevent already worrisome inflation levels from escalating further. The central bank in Beijing raised its benchmark one-year deposit rate by a quarter of a percentage point, to 3 percent.

….Data released by the National Bureau of Statistics on Jan. 20 put the pace of growth at 10.3 percent for 2010 — up from 9.2 percent in 2009 — significantly above what analysts had expected. Inflation came in at 4.6 percent for December — well above what the authorities are comfortable with — and could rise further, economists believe. As in many other emerging economies, rapid growth has combined with easy credit and inflows of cash from overseas to push up asset and consumer prices this year.

Plus there’s this:

The state-run news media in China warned Monday that the country’s major agricultural regions were facing their worst drought in 60 years and said Tuesday that Shandong Province, a cornerstone of Chinese grain production, was bracing for its worst drought in 200 years unless substantial precipitation came by the end of this month.

World wheat prices are already surging and have been widely cited as one reason for protests in Egypt and elsewhere in the Arab world. China has been essentially self-sufficient in grain for decades for national security reasons, and any move by China to import large quantities of food in response to the drought could drive international prices even higher, creating serious problems for less affluent countries that rely on imported food.

Obviously this could cause problem for other countries, as the Times notes. But I’m also working on the assumption that China’s measures to control its economy are too little too late, which means that a shock to China might also be the catalyst that bursts China’s bubble, and does it abruptly rather than gradually. Unfortunately, I continue to consider it likely that China in 2011 is similar to the United States in 2007, with disaster looming around the corner. We did too little to head it off then (though by 2007 it would have been too late even for more extreme measures to be effective), and I suspect China is doing too little to head it off now.

Yes, I know I’m wearing my pessimist hat this morning. Hopefully that’s all there is to this.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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