The land sale was a typical transaction in China, where all real estate ultimately belongs to the state and where local governments, lacking other sources of revenue, fund themselves by selling public property for development. This has been a big business in China during the past few years, as housing prices have soared and China’s savings have been poured into speculative land deals. In that sense, the dispute in Wukan is also typical: Corrupt land sales, and the resulting dislocations of local residents, are one of the leading causes of unrest across China.

China has depended on rising real estate prices not only for local government funding but also for much of its growth in recent years. As Tsinghua University business professor Patrick Chovanec reports in Foreign Affairs, residential real estate construction now accounts for a tenth of China’s gross domestic product, compared with 6 percent of U.S. GDP at the peak of this country’s housing bubble in 2005. Prices have started to plummet in Shanghai and Beijing, leading to despair, and even small-scale violence, among those who invested life savings in costly but now unmarketable apartments. Indeed, the Communist officials in Wukan who managed to sell the pig farm were lucky: More than 100 local government land auctions failed in November, according to Chovanec.

The potential consequences of a Chinese ­bubble-burst are immense. They range from a huge and expensive bailout of local governments by China’s central authorities to a drop in global demand for iron, copper, lumber and heavy construction equipment.

At first, the run-up in Chinese real estate was warranted by the country’s rapid urbanization. But what has kept it going long past the point of sustainability is, ultimately, a lack of freedom: In this case, strict capital controls that prevent most Chinese citizens from investing their hard-earned money as they choose. With state-owned banks offering paltry interest, and China’s stock market still an underdeveloped casino, the only alternative was real estate.

The solution to China’s internal economic imbalances is to be found in the same direction as the solution to the protests bubbling up in Wukan and elsewhere. The society must be opened to a range of free choice, economic and political, commensurate with its level of economic advancement. On the willingness of Communist authorities to change rides the fate not only of China’s people but of many other nations whose economies and futures are intertwined with theirs.