Good reportage from the BBC’s Business Correspondent, Paul Mason –
The economy is overheating: 8.7% annualised inflation; a 23% rise in food prices.
In a wholesale market in Shanghai, I met stallholders furious at being squeezed between rising farm prices and the low disposable incomes of their clients.
In the glitzy cocktail bars of that city, I met others able to ride the wave of the overhead.
Some 150 million people are now gambling their savings on the stock exchange. The typical investor is young, female and wears Burberry.
They are confident their government will not allow the current stock market bubble – 400% up in four years – to turn into a crash.
But when you get out of the eastern seaboard and see the industrial heartland of China, it is clear the economy may not be the biggest problem.
There is a water crisis: major rivers like the Yangtze are being polluted beyond repair.
Meanwhile, the Chinese government is planning to divert whole river systems to feed and water Beijing during the Olympic Games.
For me, the question is this: can China’s governance system cope with the increasingly complex and critical decisions that economic development is posing?
In other words, is its development model sustainable – or will too rapid and one-sided progress hit the buffers, economic, environmental and social?