Why it's hot
A decade-long boom has lifted many of China's 1.3 billion citizens out of poverty, spurring epic consumption and building. As a result, China's stock market has risen nearly 300% over the past 15 years.
Why it's worrisome
Much of that building and spending has been funded by debt. Last year Chinese banks made twice as many loans as they did in 2008, boosting lending by the equivalent of 29% of GDP. Housing prices continue to rise despite reports that 65 million dwellings in China are vacant.
Verdict: a bubble
Cracks appear to be slowly forming. China's stock market is down this year, and in July its manufacturing expanded at the slowest pace in 17 months. China's central bank has tightened its policies in an effort to rein in risky lending. Some savvy investors, including short-seller Jim Chanos, have turned bearish. Chanos said in April that China "is on a treadmill to hell."
NEXT: U.S. treasury bonds
Last updated August 23 2010: 2:56 PM ET