The economic miracle of China may be about to undergo a crash landing. The potential for social unrest to spread within and across China notwithstanding, China is trying to delicately nip an inflationary surge in the bud, but risks crashing its housing market in the process.
There are signs that it may have already done so.
High inflation is a sure-fire way to ignite the poorer classes of people, with which China remains generously endowed. So China is actively talking about and targeting inflation via its monetary policies:
China’s Key Aim is Taming Prices as Wen Vows to Narrow Widening Wealth Gap
March 5, 2011
China will target inflation as the top economic priority this year and narrow the gap between rich and poor as the government seeks to maintain social stability, Premier Wen Jiabao told lawmakers in Beijing.
“We cannot allow price rises to affect the normal lives of low-income people,” Wen said in his state-of-the-nation report to the annual meeting of the National People’s Congress yesterday. “We will reverse the trend of a widening income gap as soon as possible.”
Wen, 68, confirmed targets of 4 percent for full-year inflation and 8 percent for economic growth, as the Communist Party seeks to maintain support for its 61-year rule.
“Inflation is a potential trigger point for social discontent,” said Liu Li-Gang, an economist at Australia & New Zealand Banking Group in Hong Kong who formerly worked for the Hong Kong Monetary Authority and the World Bank.
by guardia 
