Economic adjustment is the process of correcting the mistakes made by an economy during its boom cycle. If government intervention prevents the market from clearing, it could lead to a prolonged and severe depression with seemingly endless repercussions. However, if misallocation of resources is quickly corrected, the economy can soon move past the adjustment phase and enter the next cycle of prosperity.
In the case of China's economy, the biggest mistake made during this boom cycle has been the excessive expansion of the export sector. In essence, this represents credit expansion under a system of mandatory national savings, which may ultimately trigger a global economic adjustment due to an international debt crisis. However, in the short term, due to interventions, the prosperity fueled by this credit expansion will likely continue until the next bout of inflation reappears. That said, the next round of inflation might very well be a fully uncontrollable hyperinflation. But before that happens, we may still enjoy one or two more years of good times.