Consider the following picture: Recent growth has relied on a huge construction boom fueled by surging real estate prices, and exhibiting all the classic signs of a bubble. There was rapid growth in credit - with much of that growth taking place not through traditional banking but rather through unregulated "shadow banking" neither subject to government supervision nor backed by government guarantees. Now the bubble is bursting - and there are real reasons to fear financial and economic crisis.
Am I describing Japan at the end of the 1980s? Or am I describing America in 2007? I could be. But right now I'm talking about China, which is emerging as another danger spot in a world economy that really, really doesn't need this right now.
I've been reluctant to weigh in on the Chinese situation, in part because it's so hard to know what's really happening. All economic statistics are best seen as a peculiarly boring form of science fiction, but China's numbers are more fictional than most. I'd turn to real China experts for guidance, but no two experts seem to be telling the same story.
Still, even the official data are troubling - and recent news is sufficiently dramatic to ring alarm bells.