I have predicted in the last year that China will face either a social or a financial crisis that threatens the regime sometime in the next few years. This piece by the prescient Minxin Pei and a colleague from the Carnegie Endowment for International Peace (where I spent a semester working on terrorism issues a while back) makes the important point that a financial crisis could trigger a political crisis.

They write:

...when it comes, a Chinese stock market crash will produce serious political consequences. Official figures show that more than 100m people have invested in equities, mostly during the recent bull market run. A massive sell-off will hit their household net worth. Because the Chinese government has been perceived as an active promoter of the country’s stock market, tens of millions of individual investors, members of the privileged urban middle-class, will direct their ire at the government. To make matters worse, most publicly listed companies are state-owned, so investors assume that the state is liable for the collapse of their share prices.