A couple of years ago, oil cost $19 a barrel. Today it costs $70. We all know that everything starts with oil and that its relative abundance is the key to making our economy hum. Simply put, oil keeps the shelves stocked. So then why, in the face of a 350% increase in the price of oil, does that blender you just bought at Wal-Mart still only cost $12.95?

For a long time now, the Chinese government has been buying up US Treasury bonds and other American securities at an incredible rate. At this point, they own more than a trillion dollars worth of them. The upshot of all that buying is twofold. First, as Niall Ferguson pointed out in the New York Times this weekend, the average Chinese person, who earns about 1/7th what the average American does, is actually loaning us money in substantial amounts. And second, the value of Chinese currency remains extremely low compared to the value of US currency -- you can buy a lot of yuan for your dollar.

As it turns out, it's the flow of all these securities that is keeping your blender cheap. By ensuring that it maintains a devalued currency, the Chinese government is able to foster a favorable climate for the export of goods. Combine this with an almost unlimited supply of people willing to work for very little money, and you've got a cure for inflation. As such, the financial policies of the Chinese government help Americans do what Americans do best: consume.

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It's about time 90ways tackled China. Or at the very least, started to consider it. After all, 20% of the world lives there. And though the term "the Rise of China" seems somewhat presumptuous on the part of the journalists and economist who use it on an almost constant basis (what inferior depths are the Chinese rising from, exactly?), the term is accurate in many ways: less than thirty years ago China was economically, diplomatically and culturally cut-off from the rest of the world by design. Today, it is the world's third largest exporter and its fourth largest economy. Its economic policies keep our blenders cheap and allow us in the United States, the world's most powerful economy, to maintain our way of life. Within the next few years, it will be the world's largest producer of CO2.

China has developed tremendous economic clout in the last thirty years, and it's only going to get cloutier. Right now, the per capita income in China is about $6,800. In the United States, it's about $42,000. China has about 4 times as many people as the United States, which means that once China's per capita GDP reaches 1/4 the size of America's, the total size of the two economies will be about the same.

The Chinese economy has grown at about 10% per year for a good long time now, while typical growth for the US is about 3.5%. Given the current growth rates, the Chinese economy will eclipse the US economy some time around 2015. Assuming, China slows down a little bit (a likely scenario), that moment will occur somewhere between 2020 and 2025.

The bottom line: in about 20 years, America won't be the biggest kid on the block any more.

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One article is simply not enough to learn much of anything about China, though some of the statistics above should give a rough sense of just how large a role the country will play in world affairs over the coming decades. As we here at 90ways start to look more deeply into China's appearance on the world stage, we will try to consider both what America is doing to China and what China is doing to America.

The United States and Europe are not the world's only globalizing powers. Obviously, America wields tremendous global influence. We export our economics, our culture and our values across the globe. But, try as we might, we can't make globalization a one-way street. We've experienced virtually no inflation even as oil prices here in America have climbed steeply over the last several years. We continue to purchase $12.95 Wal-Mart blenders at a record pace. But it's not because Alan Greenspan was a genius. It's because the Chinese government owns a trillion dollars in US bonds and controls an almost limitless supply of people who will work for a dollar an hour. Or, to put it the way Robert Barbera did a few months ago, "The answer to the question 'Who will succeed Greenspan?' is "Hu will succeed Greenspan."

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