Patrick Chovanec has written a perceptive piece on China calling the country on the verge of a nervous breakdown:
For the moment, I’m reminded of that song: Something’s happening here; what it is ain’t exactly clear. But — and this is the real point — something is happening, and people both inside and outside of China are right to be nervous. [That is spot on. The full piece is here]
This Bloomberg article has some suggestive answers to the poser in Prof. Chovanec’s piece. Those answers are not pretty.