Originally posted by JeffC:
I disagree. Does anyone doubt that China will get there? No. So what if it's not there now. It doesn't change the fundamentals. 1.6 Billion people. Some of the best math and science minds in the world, thanks to their emphasis on science and math in education. And the second largest holder of U.S. debt in the world, after Japan. None of that has changed.
Not sure I'd bite on that one, because making up $4 trillion isn't pocket change. You are talking about China duplicating what looks to be at least several (3-4 years, possibly more) of continuous growth at existing levels, and the export numbers (at least anecdotial for the quarter ending September, 2007) just weren't there.

And there's a whole lot of other issues - China is experiencing all the negative environmental impacts of industrialization, and honestly, the water pollution and air pollution issues they are facing are just staggering (makes pollution issues in the old Soviet Union pale in comparison). The national government is having huge fights (ongoing, and honestly, they are being ignored) with both provincial and municipal governments who are going "full speed ahead" over expansion, regardless of the pollution issues. As a single example, look at the very latest reporting on the environmental issues coming home to roost on China's Yangtze River Three Gorges Project. They are now talking about having to literally relocate at least an additional 750,000 people from around the already completed project, because of "unanticipated" environmental issues. And they're not sure that doing that is going to solve the environmental issues.

Also, lets remember that China has serious natural resource issues, and from here on out, everything's going to be more expensive. Plus China has a number of outstanding subsidy issues (a Gal. of regular unleaded gas in China was priced = to approx. $2.44 after government subsidies). They just increased the retail gas costs by 10%, and there were a whole lot of problems (demonstrations, etc.). They are truly walking the tightrope without a net.

China has a whole lot of issues, and those issues will certainly affect the fundamentals. And I always remember what a good friend told me: "Ain't no such thing as a sure thing".