"Why is China doing this? It doesn't have the kind of social safety net one sees in the developed world, so it needs to keep its economy going at any cost. Millions of people have migrated to its cities, and now they're hungry and unemployed. People without food or work tend to riot. To keep that from happening, the government is more than willing to artificially stimulate the economy, in the hopes of buying time until the global system stabilizes. It's literally forcing banks to lend -- which will create a huge pile of horrible loans on top of the ones they've originated over the last decade."

There are a lot of news reports that confirm fear of general unrest on the part of the Chinese leadership. Here is a recent New York Times article on the subject:

http://www.nytimes.com/2009/07/18/world/asia/18xinjiang.html