The Faustian bargain is unraveling

Chinese students entering the workforce are having a hard time finding jobs, and this is putting stress on the bargain that the regime struck with the Chinese people:

The anxiety level of the ruling Communist Party, whose legitimacy is pegged to maintaining economic growth, is rising in lockstep with that of the frustrated workers and job seekers. On Monday, Prime Minister Wen Jiabao said at a cabinet meeting that “this year’s employment situation is very grave,” according to a government report. Earlier, the government ordered state-owned companies not to lay people off.

Some have predicted a more adventuresome Chinese foreign policy. There is nothing like a war to get your mind off domestic troubles.