[Marine_Uncle]

I agree with your analysis. Only thing with your last paragraph is there are not enough Chinese with real buying power country wise for them to build a solid economy for their own country. The US took how long since before the Civil War upward to build a manufacturing, research/development, financial system that could keep America on the top and sell to the rest of the world as well.
As the Chinese companies continue to close down, and the folks move back to their little farms etc., they move backward in time. They need the rest of the world to sell their junk, or they go under.

[blam]

Many people say that China is developing it's own domestic consumer market based on some import data from Korea, Japan and other Asian countries. This article says otherwise and why we've misread the bigger story.

Asia: The Coming Fury

Walden Bello | February 9, 2009
Editor: John Feffer

As goods pile up in wharves from Bangkok to Shanghai, and workers are laid off in record numbers, people in East Asia are beginning to realize they aren't only experiencing an economic downturn but living through the end of an era.

[snip]

Even though China appeared to be a new driver of export-led growth, some analysts still considered the notion of Asia "decoupling" from the U.S. locomotive to be a pipe dream. For instance, research by economists C.P. Chandrasekhar and Jayati Ghosh, underlined that China was indeed importing intermediate goods and parts from Japan, Korea, and ASEAN, but only to put them together mainly for export as finished goods to the United States and Europe, not for its domestic market. Thus, "if demand for Chinese exports from the United States and the EU slow down, as will be likely with a U.S. recession," they asserted, "this will not only affect Chinese manufacturing production, but also Chinese demand for imports from these Asian developing countries."

[snip]