Finally the year of the dragon (China) hath come. Last November I made a tour in former Manchuria area of China, and have come to assume that China's economy in terms of purchasing power may soon overtake that of the U.S.A.

In China the number of the urban population is about 600 million, and if even a half of that population start to enjoy a normal standard of life (and China already has about one million millionaires. More than 50 thousand Chinese possess assets over ten million dollars), then it is well on par with the U.S. If we calculate what they eat (still very cheap) in the current American prices, the Chinese GDP may swell substantially (they do eat quite a lot!). And just compare Chinese "smaller" cities with population of 200 thousand with American counterparts. The number of high-rise offices and apartment houses well surpasses the level of the U.S. provincial cities.

Something extraordinary is taking place in the world. The West and Japan have awoken the dragon, giving it Prometheus' fire, the industrialization.

Alarmist discussion in the U.S. will rise, ranging from appeasement policy (with Taiwan, South Korea and Japan as sacrifice to the dragon's altar) to policy of containment. In Japan, too, discussion may swirl to determine whether Japan should "fundamentally change its strategy", sandwiched between the U.S. and China. The discussion in Japan will be colored with all personal or ideological enmity toward the U.S. and the Japanese elite who apparently thrive on the Japan-U.S. alliance.

However, most probably, this discussion will not lead to a final conclusion neither in the U.S. nor in Japan. The U.S. will be involved in the presidential election and Japan may again be mired in a next round of government change (it has become our ［or mass media's］malaise). Meanwhile, the U.S. economy may recover, pushing aside all discussions about downfall of the U.S.

Japanese firms are vigorously overcoming the blows of the earthquake and tsunami (production volume has been recovered and profits are going up), and the extra government expenditure after the quake (about ten percent extra) will show its real effects this year.

The ruling Democratic Party has determined itself for a consumption tax raise from 5 percent to 10 toward 2015, which will improve the financial position of the Japanese government (by additional revenue of about 125 billion dollars), the debts of which have reached the amount twice as big as annual GDP. In view of the fact that about 90 percent of the Japanese governmental bonds are digested domestically (Private financial assets of the Japanese is equivalent to three years of annual GDP), a crisis in the bond value can be further averted.

Therefore, so far so good. But just in case I will hurry to master Chinese so as to be able to beg the Dragon not to eat me.