"Hiking rates a quarter point a pop reminds me of Greenspan's policy of hiking rates at a measured pace. US speculation in residential real estate went on for another three years, followed by another 18 months of commercial real estate speculation.
In theory, China has other options given the nature of its command economy. Then again practice is a different matter given China's expectation to grow 9-10% a year.
Currently it is taking credit growth 3-4 times GDP to achieve China's growth targets.
Something has to give. Can China grow 10% without huge investment-driven growth, without rampant credit expansion? What about speculation in the stock market?