3. The Rise of China. As the U.S. federal balance sheet weakened China experienced exponential growth. Our weakness has become China’s strength on competitiveness. China’s continued growth is starting to put the U.S. at a great disadvantage. China already is close to surpassing Japan as the second-largest economy in the world, and it won’t stop there. It is expected the economic-growth estimate for 2009 to be 8 percent and the country is trying to improve those numbers for 2010. China is also creating a rail system to service its 1.3 billion people that virtually guarantee’s the scale of the project will be gargantuan. Almost 16,000 miles of new track will have been laid at a cost of $300 billion by the time the build-out is completed in 2020. But this project symbolizes even more than that. This monumental infrastructure build-out has become the centerpiece of China’s effort to navigate the global financial crisis and the ensuing recession. As the project progresses it is going to open up the vast interior of China to global investment and development. Over the next twenty years a huge middle-class consumer society is likely to emerge in China. And when it does, China will start drawing corporations and executives from all over the world, forcing the U.S. and Europe to compete for capital and investment as never before.

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