An article in the International Herald Tribune marvels, at least for a moment, at China’s success in becoming the 3rd nation to launch an astronaut into space, and then uses it to form an analogy:

At the same time, the space flight is an apt metaphor for the risks inherent in China’s economic rise. It is representative of the economy’s worst element: its top-down nature.

This is what the world’s most populous nation needs: bottom-up entrepreneurship that creates new businesses and jobs; a strong regulatory infrastructure for its equity and bond markets; aggressive education programs so that the tens of millions of workers being displaced by an opening economy can compete in the age of globalization; a plan to tackle a worsening AIDS crisis; and a greater effort to protect the environment.

What is Beijing offering? Vanity projects, and a fast- growing number of them. Aside from the ambitious, headline-grabbing space program, Beijing has been busy building the world’s biggest dam, its tallest building, its longest bridge, its highest railway (to Tibet), its biggest stadium for the 2008 Olympics and, yes, its fastest-growing economy.

The writer, a Bloomberg reporter, cleverly points out how time and again such high-flying successes are pre-cursors to disaster, and spells out why this is a particularly strong possiblity in the case of China, where the banking system on which so much lies is rotting from the inside out:

Just as Beijing hopes to grow out of its bad-loan mess, it hopes rockets and space capsules will lift spirits and deflect attention from problems involving human rights issues, financial-system transparency, free speech and dodgy labor laws.

The biggest risk to China’s outlook could lie in the “Skyscraper Curse,” or the uncanny correlation between world’s tallest-building projects – or other vanity ones – and financial crises.

Be it Kuala Lumpur in the late 1990’s, Chicago in 1974 or New York in 1930, the erection of the next architectural monstrosity has been a bizarrely accurate economic indicator. Having claim to the world’s biggest or first this, that or the other thing, is as much about ambition as it is about excess.

Periods of over-investment and financial speculation, fueled by excessive monetary expansion, tend to drive developers, investors and politicians to architectural and scientific one-upmanship. Call it towering hubris, something Beijing seems to have in abundance.

China has been to space, and it is getting the headlines it wanted. But Beijing had better begin expending the same amount of time and resources shoring up its high-flying economy.

I am becoming increasingly convinced that we are witnessing a great big bubble in the making. It may only be half-filled with air at the moment, and it may take years before it bursts. But burst it will, and I hope I’m no where near China when that painful day arrives.