No it is not, a slowing economy crippled by 346% in debt/GDP; it's not the artificially high exchange rate (which was pegged to a dollar when it was plunging during QE1-3 and is now soaring) yet which China can't aggressively lower either as that would mean a disorderly flight of capital from the mainland; it's not the feedback loop of plunging commodity prices and highly levered domestic corporation which can not pay their annual interest expense payments; it's not the recently burst housing bubble; nor is it the burst stock market bubble which recently popped, or the bond bubble which is about to blow; nor is it the country's non-performing loans, which may be as high $4 trillion.

According to ordinary Chinese workers, i.e., those who know best, what the local government is most fearful of is precisely what we said three months ago is the "biggest and most under reported risk facing China." From Reuters:

At a printing factory in the western city of Chongqing, a Reuters reporter was present when a local official visited last week to make sure the boss paid his workers before the Year of the Monkey begins. The official declined to speak with Reuters, although the boss later said it was an attempt to prevent unrest. "That's what the government is most fearful of," said the factory owner, who did not want to be named.

Indeed it is, and all those economic and financial factors, while ultimately leading to social unrest, are secondary: what Beijing is most terrified about is an accelerating to the recent surge in worker anger and increasing incidents of violence.

According to Reuters laborer Fan Fu and 20 or so colleagues working on the Zixia Garden apartment complex in Hebei province have not joined China's legion of migrant workers returning home to celebrate new year with their families.

Instead, they have camped in the offices of the property developer's subcontractor, demanding almost a year's unpaid wages and too angry and proud to go back to native towns and villages empty-handed. As we warned in November, "with China's economy growing at its slowest in 25 years, more workers face Fan's predicament and labor unrest is on the rise, a concern for Beijing as it seeks to avoid social unrest even as financial pressures build. "The developer has kept using the fact that they have no money as an excuse. As of now they haven't paid us a single penny," said Fan, who brought others from his home town in the western province of Sichuan to work on the apartments. "We really don't have any other options," he told Reuters in the subcontractor's offices, crowded with bedding and personal possessions. The group had earlier petitioned local authorities for redress and staged protests outside government offices in Qian'an, a city in Hebei in China's north.

However, while the government will do almost anything to cool tempers, it won't do what is critical: provide the underpaid workers with what they are owed for the simple reason that China, unlike western nations, simply does not have an established welfare state with features comparable to unemployment insurance. Fan and about 530 other workers on the apartment project are owed paychecks of between 20,000 and 50,000 yuan ($3,000-$7,500). They said the government had offered each non-local laborer 2,000 yuan in cash if they left for the holidays. It was unclear if they would get some extra cash if they never came back.

Angry unpaid workers skip China's big holiday: https://t.co/jP5UfgR8Zr — Reuters TV (@ReutersTV) February 6, 2016

One thing is certain: worker anger is building at a torrid pace, and it is only a matter of time before the fury of of millions of angry recently unemployed or unpaid workers spills over on the streets.

As travel ramped up ahead of the holiday, beginning on Sunday, it was not only construction workers who prepared to celebrate with less money in their pockets. An online survey by the job recruitment company Zhilian Zhaopin said two-thirds of more than 10,000 white-collar workers it surveyed were not expecting Lunar New Year bonuses. In Dongguan, a city in the southern province of Guangdong known as a manufacturing hub, some factories sit idle behind locked, rusty gates, with advertisements pasted on their walls seeking new tenants. Some of those still in business were withholding bonuses until after the Lunar New Year, workers, factory owners and recruiters interviewed by Reuters said. Brothers Zhang Guantian, 23, and Zhang Guanzhou, 21, quit temporary, hourly paid jobs at two plants, one making earphones, the other computer cables, to go home for the holiday. "It's hard to find a permanent job now," said the elder Zhang, while waiting for a bus with two large suitcases. Still, he is hopeful of finding another job when he comes back to Dongguan in mid-February. "My aim is to find a permanent job after Chinese New Year, something I like. But it will be difficult."

It will be almost impossible, and soon even those with temporary jobs will be considered lucky.

Finally, Reuters uses a data set first presented on this website, one showing the record surge in labor strikes. Its data show that in December and January, there were 774 labor strikes across China, from 529 in the previous two months, most of them over wage arrears.

Finally, here is why what as recently as three months ago was the "most underreproted risk facing China" is suddenly the most popular topic of coverage among the mainstream press: