The Looming China Crisis

When Western executives and investors look at China, the first thing they see is opportunity. China’s population of 1.3 billion people seems to represent a spectacular potential market for American products and services. Every week, foreign companies pump another $1 billion into China, according to The Economist.

For example, China is the largest cell phone market in the world, with about 350 million users, according to The New York Times. Its life insurance market, valued at $39 billion in 2004, is expected .....