Based on the report, the Chinese government controls prices of "cooking oil, sugar, gasoline, tobacco, salt, coal and fertilizer", plus whatever food items that the new order will cover. It doesn't control EVERYTHING. Prices of stocks and commodities such as gold or copper are spared. If I had money to invest, I would invest in Chinese companies working in environmental protection, pharmaceutical research, or renewable energy fields. China has to clean up its land and rivers, provide medicines for its billions of citizens, and stop draining the oil and coal resources around the world.

I was using it as just one of many examples. Here's about one that I'm all too familar with concerning Shanghai real estate back in 2005. Unlike in the U.S., a lot of rules regulations are set at the province level, and set sporadically.

http://en.epochtimes.com/news/5-6-6/29327.html 

In an attempt to stabilize rising real estate prices, China instated a new real estate policy recently. However, the market responded negatively; both the trading volume and trading prices fell dramatically.

The Chinese government announced in May that starting June 1, a tax would be placed on all housing sold if the owner hadn’t lived in for more than two years. For non-residential housing inhabited for more than two years, the government also placed a business tax on the difference between the sale price and the original purchase price.

On June 1, 2005, the first day China implemented its policy, the average trading price for real estate in Shanghai dropped by 1,426 yuan (US$172.30) per square meters to 5,884 yuan (US$710.93).
　　
The trading volume for new commodity housing was 251, only half of what it was the day before the new policy was implemented, according to Shanghai’s official real estate transaction data. In general, trading volume was only one half what it was usually.

President Hu Jintao and Premiere Wen Jiabao have realized that rapidly rising housing prices have caused serious threats to overall economic stability. High-level officials in the State Council recently issued a notice about stabilizing real estate prices. It gave eight directives, explicitly ordering local governments and relevant departments to keep real estate prices from rising too quickly.

Despite their fear of a drop in housing prices, they were also afraid of weakening the already struggling state-owned bank system, said Free Radio Asia commentator Liang Jing. Liang said that Hu and Wen hesitated and did not take any firm measures regarding the continuing rising housing prices because they are afraid that big changes in real estate prices will deliver an unbearable blow to the already weak state-owned banks, according to his article “High Real Estate Price Challenges Hu and Wen’s Governing Capability.”

Because house developers and home-buyers in mainland China rely heavily on loans from state-owned banks, a sudden drop in realty prices will worsen the crisis for state-owned banks. Approximately 50 percent of the total capital in China’s state-owned banks is invested in the real estate market. Any sharp decline in the real estate market will hit the banking system directly.

According to the Chinese government’s regulation, starting June 1, transaction taxes will be exempt for ordinary housing only if a property ownership certificate has been obtained or contract taxes have been paid for more than two years. On June 1, the Beijing Construction Committee published the tax at 5 percent for Beijing and 5.5 percent for Chongqing, according to a June 1 report from Jinghua Times.

Real estate agents in mainland China estimate that the taxes may cause housing prices in Shanghai to drop 20 percent or more. Yi Xianrong, Chief of the Banking and Finance Division, the Research Institute of Banking and Finance under Chinese Academy of Social Sciences believes that the real estate price will drop in Shanghai, and he will not be surprised to see a drop by as much as 50%, due to the big bubble in Shanghai housing market, reported the latest edition of China News Weekly.

High-end market sales are where most of the price difference will be felt. Infrastructure for mid range housing will protect prices from falling and the lower end market will not be effected.

Prices had been dropping throughout the month of May as real estate speculators reduced their prices to make sales before the June 1 deadline. Just before June 1, long lines piled up outside real estate transaction centers across Shanghai. In the month of May after the policy was announced the real estate price in Shanghai and Hangzhou city dropped nearly 10 percent, and the resale of homes dropped 50 percent.

This is not the first time that real estate prices in Shanghai have risen and then sharply fallen.

In 1993 when Vice Premier Zhu Rongji took the first macro-control measures, the real estate market froze An old Taiwan businessman recalled that the price for housing in Hongqiao and Gubei suddenly dropped from $US3,000 per square meter to $1,500. Not only were there sharp price cuts, but nobody would buy the discounted houses.

Now investors from Taiwan, Hong Kong and South East Asia who want to buy real estates in Shanghai cannot help but wonder if there will be another real estate price collapse.

 —–

There chinese stock market is in uncharterred territory. I wouldn't be surprise if we start seeing more sporadic controls and rules to curb the runup.