China should have never begun to participate in the finance system the way it did for the last forty years. They may have made great strides to compete with the "First World" States, but the harder they come, the harder they fall, and considering the expectations that China will be the new global leader will cut them down to size. China runs off of the same paradigm as everyone else: Slave wages for the poor, a police state system, and a fiat ponzi of epic proportions. They owe all of their wealth to the dollar, and the dollar being nothing means they have no wealth.
China's finance ministers have played the game with precision, but when anyone plays a game without rules, they will get burned. China went along with the Fall of '08 because it created the opportunity to buy precious metals on the cheap. It also gave them time to lesson their dollar reserves on a real basis, as the dollar has lost a lot of its value over the last few years. Real estate in China is falling at an epic pace, and China really has no other viable investment other than their corporations that mine and drill oil all over the world. Their military is on the up, but if war was ever to solve any problems, then only doom is the saving grace of humanity, and what a bleak picture that will be.
China has tried to pull out quite and slowly of the fiat ponzi. There will be a point where they will try to run, but their gold reserves per capita is still very low, and this will be the key to backing their currency, the Yuan. They could make a play at silver, but any big move to precious metal will crush their dollar holdings, and if they are to blame for ending the dollar, the world will look at them as the antagonist.
China, like all other States, is in a lose/lose situation financially. They have no means to their ends, and they have hit the proverbial wall of finance. Their partnership with the "Free" World is over, but not officially. Whatever their next move will be could end their and the worlds fiat ponzi game.
China has also used an amazing amount of posturing without any dramatic follow through; considering the art of war, this would mean China is very weak. Minimal rate rises and threats of selling dollars, among other things, have brought no change in policy. This shows China's weak hand.
In the mean time, they will have to quell riots, food and wage riots, and try to maintain a social structure that is pathetic at best. The people of China have suffered as long as any, and they are rebelling like Africa, but because China has the web and press sanctioned, it is hard to report. This does not matter, as the house of cards has crumbled, and the Empire lies naked. China decided long ago t participate in the Emperor's ball, and they too dance naked.