While the Fed's decision to taper back its monthly asset purchase program to $75 billion has received a lot of attention, many have overlooked the news out of China.

The seven-day repurchase rate was up to a six-month high of 7.6% in Shanghai on Friday. It closed at 7.06% on Thursday. The People's Bank of China [PBoC] injected money through short-term liquidity operations on Thursday.

We already saw a severe credit crunch in China back in June, and some are worried that we're going to see a repeat of that.

Hedge fund manager Jim Chanos described this week's run up in money market rates as "a bit of a banking crisis," in a CNBC interview.

Patrick Chovanec of Silvercrest Asset Management tweeted that China's banks have "huge off balance sheet cash obligations like wealth management products that come due and they "rely on continued injections of new cash to stay liquid, otherwise they default."

But why are rates rising now? China's move to let the market determine interest rates and not conduct reverse repos have weighed on liquidity. "One theory which could quickly attract audience for its simplicity is that the omnipotent PBoC intentionally guided interbank rates higher to force banks and their clients to deleverage," writes Bank of America's Ting Lu.

"The People's Bank of China [PBoC] knew that the bottom-up interest rate liberalization pushed up short-end rates and bond yields, so even Shibor rose, credit growth remains high (such as the case in November). If the PBoC wants to contain credit growth, it’s forced to allow interbank rates to rise."

Ting characterizes this as some confusion on the part of the central bank and writes that "with its limited predictability of flows and its insensitivity to market reactions, the PBoC finds it much more likely than before to make operation mistakes."

Many argue that the central bank's efforts to impose discipline haven't been fruitful. "With its limited predictability of flows and its insensitivity to market reactions, the PBoC finds it much more likely than before to make operation mistakes," writes Ting.

The Shanghai Composite is down 1.65%.