A country, especially one the size of China, can't grow at an average rate of 8% for 30+ years, and not create some imbalances. I'm talking here about a country bubble (not a stock market bubble). China has already had a stock market bubble, with the air coming out in 2007 and a recovery beginning in March of this year.
Everyone knows the future is China's, and that is true. But the path between point a. and point b. on the economic development timeline is not always smooth (as in 8% growth every year!). China reminds me of one of those old movies where the steam engine is racing along the track going faster and faster as the train driver continues to stoke the furnace, and even as it keeps going faster, more and more things are falling off the wagon. Eventually, it goes beyond the point of no return and blows apart at the seams. That, I am afraid, is the economic destiny of China. It is on a collision course with history. I don't know when that day of reckoning is going to come, and I don't know what will push it over the edge.
Hopefully it won't lead to social disorder or anything like that. But there is a price to be paid for defying the laws of economics.
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