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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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THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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