In this study of the rise of the Chinese economy, Oded Shenkar, who has written and edited several books dealing with international business and management, gives an expert in-depth analysis that can significantly contribute to the understanding of China as an emerging power. The publication of this book coincides with the increasingly thorny problem of the trade deficit between China and the US. The US trade deficit with the rest of the world grew to US$ 726 billion in 2005, including a deficit of more than US$ 200 billion with China.

This situation is a big challenge for the US Congress, and has increased demands for protectionist measures against Chinese products entering the US. China is not the first country that has risen from the status of a developing country to that of a superpower. But its rise has been faster and has had more impact on the rest of the world than the Asian economies known in the 70s and 80s as "dragons," whether large or small. China now appears to have gained dominance over those former "dragons," which include Hong Kong, Taiwan, South Korea and Singapore. China is now the world's third largest economy, behind only the US and Japan, and economic think tanks have predicted that it may surpass the US within two decades. Products that were "Made in China" have flooded the world's markets, and can be found in the US in luxury department stores as well as low-end stores, such as Wal-Mart, which carry cheaper products. Toys are an example. Seven of every 10 toys sold in the world are now made in China, whereas in the past major toys manufacturers were found only in Hong Kong, Taiwan and South Korea. The toy industry uses non-strategic technology, thereby escaping major hurdles erected by many Western governments to protect their territories for security reasons. China has also moved to products that require intensive capital and advanced technology, including manufacturing high-end flat-screen televisions, computers, cars and expensive household products. The US now imports over US$ 10 billion in Chinese-made furniture and bedding per year, for example.

"China has helped create what seems like a shoppers' paradise in the US," Shenkar says.

The relationship between China and discount stores like Wal-Mart has become increasingly closer. US discounters rely heavily on China for products at the lowest possible prices, even as China depends on such stores to gain entry into the US market. Furthermore, fake goods made in China flooded the US market at the same time that the level of pirated products has spiraled out of control. Pirated goods have inflicted heavy loses on Western industries specializing in movies, records and music, computer software and applications, entertainment and publications. In 1998, China's Development and Research Center estimated the annual sale of pirated products at US$ 16 billion. That amount now exceeds US$ 20 billion a year.

While it is making plans to develop its economy to global standards, China is also sending students to foreign universities to gain the kind of education that could help their motherland. The US had 65,000 students from China in addition to 36,000 students from Taiwan and Hong Kong in the 2002-2003 academic years. Chinese students have shown a higher interest in engineering and sciences than those from other countries, which could benefit their home country enormously.

"China's economic aspirations are aligned with its political ambitions, and the (Chinese) regime is aware more than most of the close connection between the two," Shenkar says, adding that Beijing is determined to overcome obstacles to its desire to reach the goal of an economic power. The rise of China in the 21st century has been a topic of comparison with other world economies like the US and Japan. Shenkar said China's economic ascent can be compared with that of the US in the early part of the 20th century. But he says the case of China is unique because it is rooted in the country's vast population of 1.3 billion, its sky-high ambitions and a combination of skills, resources and bargaining power. Many industries in developed countries that depend on cheap labor have been caught unprepared by the advance of the Chinese economy and have had to close simply because China has better labor-intensive economy. The author provides in-depth examination of several advantageous aspects of the Chinese economy over those in some Western nations.