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Looking for a bubble? Check this market

Everyone, these days, is looking for a bubble here in the U.S. But it may be more wise to look overseas — to China.

Share holders observe the stock market at a stock exchange corporation in Nantong, Jiangsu province of China.
ChinaFotoPress | Getty Images
Share holders observe the stock market at a stock exchange corporation in Nantong, Jiangsu province of China.

Whether it's Shanghai, Shenzhen, or Hong Kong, Chinese stocks are shooting up like bottle rockets, lifted, in large part, by individual investors. Not to condescend to "mom and pop" anywhere in the world, but they are often the last ones to arrive at a party, and the first to be carried out the door.

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Consider that the Shenzhen market now has a market cap of $3 trillion, with individuals rapidly bidding up prices of small -- but hot — Chinese stocks. Shenzhen stocks are up 55 percent, year-to-date. Shanghai is up 27 percent YTD and has doubled in the past year. Hong Kong has shown more restraint, up 2 percent YTD and more than 20 percent from its 52-week low. But with China connecting mainland and Hong Kong markets, the action in the Hang Seng has been quite brisk, of late, lifting Hong Kong stocks to a seven-year high.

The speculative excesses on display in China, including a 165-foot tall statue of a bull at the Shenzhen Exchange, is reminiscent of the heady days of individual investors chasing the hot stocks of the 1990s, here at home.

This all comes as China's exports to the rest of the world dropped 15 percent year-over-year last month.

Talk about a bull in a China shop!

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True, many expect the People's Bank of China to ease policy further, possibly launching its own version of quantitative easing. Easy money policies lift asset prices, to be sure. But China has some ills for which there are no immediate cures that come from programs like QE.

China is growing more slowly, exporting less to a sluggish global economy, and struggling with demographic issues that do not favor rapid growth going forward. Its shadow-banking system is even more heavily leveraged than that of the U.S. and Europe in the mid-2000s. China has spent nearly $6 trillion on uneconomic, unused, or unusable, infrastructure in the past five years, or so. That cannot simply be absorbed with lower rates and looser fiscal policy.

The "If you build it, they will come," philosophy has driven China's growth and investment over the last two decades, but even Beijing acknowledges that growth at all costs may be a vestige of the past.

Read MoreWhy the dream run in Hong Kong stocks will continue

Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. He also editor of "Insana's Market Intellgence," available at Marketfy.com. Follow him on Twitter @rinsana.