China, as with much of the far east, operates on a three-cornered legal system. We're unfamiliar with it because we see "legal and illegal" whereas in China, Vietnam, Korea, Japan, Laos and Thailand, there's "legal, illegal and quasi-legal." The Western thinking on Yakuza, for example, is "organized crime." It's more accurate to say that the yakuza is part mafia, part freemason, and part social club. They print business cards, for fuck's sake. As such, in Eastern economies it's not unusual for the equivalent of the Shriners to shake down property owners for protection. On the books, this is illegal. In reality, it fills in a lot of the gaps in functionality between what is legal and what is not.

Japan, in the go-go '80s when the Yakuza were really flourishing, also had massive real estate speculation. The quasi-legality of it all amplified the effect. The Tongs, meanwhile, have grown rather nicely under the westernization of China:

http://www.amazon.com/Blood-Brothers-Criminal-Underworld-Asi...

China, in a nutshell, is a managed central government attempting to take a billion people from feudalism to capitalism in three generations. I'm unaware of any other sociopolitical work of that magnitude in the history of the world. As a result, when they fuck up they fuck up royally. The Chinese real estate market is an excellent example.

At the same time, no other economy can go "you know what? We're going to take a couple steps back towards feudalism" to solve their problems. People will starve, exports will crash, dissidents will be executed and thousands will die in coal mines but that's kind of how China rolls.

China did say "you're on your own guys" when the EU asked them to add liquidity to the Greek crisis. Anybody credible can see that China is in a bubble (Mauldin has blinders on).