Of all the fears discussed in the financial community these days, worries over China's expansion loom large. The government in Beijing has revised down its growth expectations to 7% to 8% a year from the old, breakneck pace of 10% to 12%.

Private groups, such as the American Chamber of Commerce in China, have made similar downward adjustments in their expectations. Meanwhile, concerns about a burst Chinese real estate bubble cast doubt on even the reduced growth expectations, not the least because they call to mind America's troubles of 2008-2009. Though there is good reason to anticipate a slowdown in the pace of Chinese growth, it would be a mistake to exaggerate the risks, and especially to do so by drawing easy parallels to America's real estate debacle.

The most immediate reason to look for a growth slowdown is last year's monetary restraint. In 2011, China tightened policy in response to increasing inflationary pressures. Consumer prices for a while rose at an annual rate of almost 7%, up from 3% in 2010. To forestall the inflationary momentum, the country's central bank, the People's Bank of China (PBC), drained liquidity from the system, raising its benchmark lending rate five times for a total of 125 basis points, increasing the reserves required of its banks six times, to 21.5% of deposits, and using guidelines to restrain lending in specific sectors, most notably autos and real estate.