Is the Chinese economic bubble about to burst? Indeed, is what we are seeing in China even a bubble? These hotly debated issues notched up a tick last week when it was revealed that Chinese manufacturing growth had fallen to its lowest level in two years.
In fact expansion was so minimal that it was only slightly above the level where a contraction would have been indicated.
But even the biggest Chinese economic doom mongers are not suggesting one piece of data tells the whole story. The official line in Beijing is that all is well and the 12th five-year-plan, which began at the start of the year, is on course and, despite a slowdown in economic growth, there is no need for alarmist talk about bubbles bursting.
This expression of blithe confidence is somewhat undermined by the strenuous efforts by the Chinese government to contain what appear to be bubbles. In the past nine months, interest rates have been raised five times, while reserve requirements for banks (which prevent the expansion of lending) have been raised nine times.
Meanwhile, in the extremely sensitive property market, the government has raised minimum down payments for second homes and is experimenting with higher taxes on these investments. Premier Wen Jiabao recently stressed his confidence in these counter-inflationary measures, emphasising that they will not detract from the policy of economic expansion.
Herein lies the rub, because the government seems to be pointing two ways at once. It wants to keep growth on a fast track, and it wants to take out inflation and prick asset bubbles. Moreover, what fuels economic growth in China is investment, not consumption. Personal consumption is seriously under-contributing to gross domestic product growth, a red flag for the doomsayers.