Meanwhile, small businesses who legitimately need capital have to resort to a shadow banking system, and that poses a whole new set a problems. The Chinese government is trying to address the issue.

Risks stemming from China’s shadow banking system and private lending must be “strictly controlled,” and such loans will be curbed, the head of the nation’s banking regulator said.

Loans to local government financing vehicles and the real- estate industry, which also pose dangers for the banking system, can be managed, Liu Mingkang, chairman of the China Banking Regulatory Commission, said at a conference.

The government and regulators have already implemented “effective measures” that will ensure the overall risks are “controllable,” Liu said, according to a transcript of his speech posted on the regulator’s website yesterday.

Premier Wen Jiabao last week pledged to support smaller companies after media reports highlighted a credit squeeze that has driven many businesses to the so-called shadow banking system to obtain loans. More than 80 businessmen in the eastern city of Wenzhou have disappeared, committed suicide or declared bankruptcy to avoid repaying debts to informal lenders, the official Xinhua News Agency reported on Oct. 12.

The story in China is much more complicated than you would learn from conventional wisdom and simple headlines.

The photo above has Bob Dylan in at the Worker’s Gymnasium in Beijing on April 6th, but there was a ton of controversy relating to his concerts in China. Dylan recently came out with a scathing statement denying that there was any censorship of his songs or lyrics during his performances.

China has a host of demographic issues facing the country as the population gets older. However, the largest issue revolves around the fact that there are too many men in China. The one-child policy has led to far fewer females being born. This naturally leads to a host of dating issues in China that will only get worse over the years.

We might see all sorts of interesting developments as this will be country where one out of four men are single, but not by choice. It will be interesting to see if China ends up allowing more foreign brides and the impact that would have on the culture. Also, more Chinese men will end up dating younger women. But then that means even fewer women available for young men who aren’t financially secure enough to compete with the older men.

It sounds like a demographic disaster and it will be interesting to see what happens.