The China dilemma for US

The continued strong growth of the Chinese economy is not guaranteed, but it is not in the best interest of the United States to expect China to fail. It is, however, important to understand some of the capabilities that are being built in China.

Many are blaming China for unemployment in the US, but this is avoiding the real problem - the US needs to build its own industries. There is also continued pressure for the revaluation of the yuan, which is, in effect, a weakening of the dollar and reduction of the buying power of the US consumer. The reality is that the yuan will rise, and the only factor is how fast Chinese goods will become more expensive for the American consumer.

A key part of China's strength is the building of a large industrial base, with many actions being taken by government agencies to support economic growth. The manufacturing base in China was initially in low-cost and lower-skill areas such as clothing and footwear, but currently it includes automobiles, iPhones and a range of high-complexity products.