So far, it doesn't look like the Chinese government is committed to ending financial speculation.

Look at the mismatch between the amount of cash Beijing has pumped into its economy and the tiny steps it has taken recently to take money out of the financial system.

The river of cash flowing in consists of $585 billion in official stimulus spending. And bank lending that doubled in the first 11 months of 2009 to $1.4 trillion from $615 billion in all of 2008. And continued runaway lending of $88 billion in the first week of January. 

If that rate were to continue, China's banks would wind up lending 50% more in January 2010 than they did in 2009.

All this has led to an explosion in the country's money supply.

Money supply, as measured by M1, was up 35% in December 2009 from December 2008. 

On the tightening side, there's the tiny hike in the interest rate that the People's Bank of China will pay banks that keep money on deposit with the central bank, and the increase, effective next Monday, in percentage of their assets that banks will have to keep on reserve with the People's Bank. 

The increase, announced Tuesday, will take the reserve requirement to 16% at big banks. That's up just 0.5 percentage points from the old rate. 

I think the government's tepid response to the truly horrifying January loan figures so far is telling. Every regulator at the People's Bank must be scared to death at the possibility that bank lending -- after running at a record rate in 2009 -- is not only not slowing down, but actually accelerating. 

And all they can get the country's leadership to accept is a 0.5 percentage point increase in reserves? 

Economic growth is still the name of the game. Expect more volatility since all speculators in China know their bets are only good until the government does move decisively. (For how to invest with this uncertainty, see this recent post.) But we haven't seen that move yet.  

At the time of this writing, Jim Jubak did not own shares of any stock mentioned in this column.