As U.S. lawmakers mull additional bailouts, and the incoming Obama administration works to craft a new stimulus package, China’s ruling regime is toiling furiously to conquer its own fiscal troubles. This morning, China’s central bank cut interest rates by 1%, the fourth such interest rate cut in the last ten weeks.  The London Telegraph reports that the People’s Bank of China reduced its main borrowing rate by 1.08% points to 5.58%, the “biggest one-off cut since the Asian Financial Crisis in 1997.”   China is suffering the strange problem of suffering only 7.5% growth this year—which would be a boom for any other country.  But as the Telegraph notes, this is “perilously close to the 7% minimum level of growth that Chinese economists believe is necessary in order to create enough jobs for the 6 million university graduates who will enter the jobs market next year.” Beijing continually struggles to tamp down labor unrest throughout the country.  The Telegraph reports: “In recent weeks, a series of riots across central and southern China have flowered as disgruntled employees aired their grievances at the downturn…Today, around 500 protesters rioted at the Kai Da toy factory in Dongguan in the Pearl River delta, flipping over a police car and trashing computers in a dispute over payoffs to 80 fired workers. Tens of thousands of factories across the region have already shut their gates.” One problem for China is that officials have adopted a strict export-oriented approach during the past 15 years.  The nation has tied its fate to the U.S. market, by both pegging its currency to the U.S. dollar and promoting exports over domestic consumption.  While currency manipulation has been distorting world markets for years, the effects have not hit home till now, as the U.S. market has entered a precipitous downturn, with decreased consumer spending.   China’s slowdown has now extended to its domestic steel producers.  The New York Times notes that a number of key Chinese steel producers have shut down operations due to decreased world demand.  This comes at a particularly unfortunate time for a newly completed, $3 billion steel plant in Ma’anshan, for example.  Furnaces and lines have been shuttered, with rolls of excess steel sitting idle on the plant floor. Noting China’s track record of dumping product, a great concern for U.S. steel producers is whether decreased demand for steel in China will mean an effort to dump this excess steel in the U.S. market—something for which the incoming administration will need to be exceptionally vigilant. China’s accelerating woes demonstrate all the more clearly why balanced, mutually beneficial trade must be established between the U.S. and China, something ManufactureThis has been repeatedly urging.