In less than two generations, without vast oil reserves or mountains of debt, China has peacefully transformed itself into the world’s preeminent manufacturing powerhouse, and for that it deserves the highest praise and admiration. America’s trade deficit with it stems in part from China’s lower labor and medical care costs, its Confucian culture of self-sufficiency,  and its well defined and scrupulously enforced  policy of currency manipulation. But the most important reason for the size and longevity of the deficit is China’s anemic consumption of consumer goods manufactured in the United States by American workers, a situation reminiscent of the period that preceded the Opium Wars. There is of course an important difference between then and now: China is no longer economically or militarily weak, and it is using its hard currency reserves -the world’s largest- to acquire wealth-creating assets worldwide, even in the United States. While  China does not have a reputation for seeking to expand beyond what it considers its historical sphere of influence, it is also true that never has it depended so much on so many others for its economy’s lifeblood -energy and raw materials.

There’s no indication that any of  this is about to change, to the contrary. The need to survive and the irresistible lure of its millions of potential customers will continue to entice  American and European businesses to invest in China. Those with the means to do so will profit at an increasing rate. The rest, -who lack the capital and mobility of their ex-bosses- are and will continue to be barred from the great river of wealth emanating from China’s booming economy, condemned instead to meager jobs selling the same foreign-made goods they once manufactured. It doesn’t take rocket science to extrapolate what the distribution of wealth will look like in another generation -with all its consequences- if remedial action is not taken now, immediately, to rescue the increasingly vestigial American middle class.