Things are really heating up now.
China had throttled their financial system over the past month when they rose yuan interest rates in Hong Kong. To ease the situation on the mainland, they injected a ton of M0 with repos.
Last night, they signaled that they were withdrawing that excess liquidity to the market, and short term rates on the mainland spiked to 10 year highs.
They don't know it yet, but the market is putting them to a decision. They can either choose low rates which will cause the currency to collapse yet allow their economy to survive in the short run or raise rates to defend the yuan and crush the economy.
This is just short run drama until the financial collapse begins. They'll swing back and forth from loose to tight monetary policy until they run out of money, or the Chinese people force the situation by panicking.
With each new week that passes, things should get more desperate there.
Generally, yes, they are very autocratic, but they seduced themselves with debt. They have a ton and much more is hidden. There's no way to know what kind of exposure the country has since they hardly disclose anything.
They're trying to protect the State Owned Enterprises right now by shutting down competing private business, an old USSR trick.
Problem is, the real world works on credit, and China is just about tapped out. If they want raw materials etc, they're going to have to pay for them.
The worst part is that they've convinced themselves they have something like a a $5k per capita GDP when it should probably be around $1,500. No credit, no way to fund that kind of GDP.
I've posted the whole story once it really started getting good on /v/collapse. Started posting more here.