Right now faster than expected growth in China isn’t a good thing.

Not in the long run anyhow. Investors in China get it even if the rest of the world’s markets still stand ready to cheer as they did yesterday.

That’s because every bit of extra growth raises fears that inflation will pick up from its already too high 4.4% in October and that as a consequence Beijing will have to restrict lending and raise interest rates to control inflation. And that, in turn, could pop an asset bubble in real estate and trigger a stock market selloff.

Which is why stocks dropped in Hong Kong and only inched higher in Shanghai on December 1 on what would be unequivocal good news in most of the world’s developed economies:  Manufacturing grew at a faster pace than expected in November. For the month the Purchasing Managers’ Index climbed to 55.2 from 54.7 in October. The consensus among economists had called for a reading of 54.8 for November, according to Bloomberg.

The survey contained an extra dollop of bad news on inflation. An index of input costs, what companies have to pay for the raw materials they use to make their products, climbed to the highest level since 2007. Cement prices, for example, climbed to a new record.

The data immediately pushed inflation forecasts higher. According to China International Capital, for example, consumer price inflation will climb to 4.8% in November from October’s 4.4% rate. The November data will be released on December 13 and some investment companies, such as Credit Suisse, are now predicting an increase in the benchmark one-year lending rate around that date. The People’s Bank raised that rate to 5.56% in October, the first increase since 2007.

The wild card in all this speculation is the euro debt crisis. Beijing will be extremely reluctant to raise interest rates and threaten economic growth if it believes that the European crisis has cut into demand for China’s exports.