China on my mind: on the way to becoming the world's workshop, China still has some details to work out.

I've BEEN THINKING about China a lot lately. Part of it, no doubt, comes from having been there a couple of times so far this year, but it's more than that. I think it has something to do with how in China we are seeing history made: things happening there right now are affecting the rest of the world like never before and, whether we like it or not, we have to deal with it.

Consider:

* China's economy is growing by leaps and bounds, an astonishing 8% a year.

* China is now the world's largest market for TVs.

* The Chinese bought nearly 1.9 million new cars last year, up 61%.

* China is the largest exporter to the U.S. of refrigerators, TVs and bicycles.

* The U.S. trade deficit with China hit a record $124 billion last year.

* Last year China consumed 40% of the world's cement and 27% of its steel.

* China is buying so much aluminum that the Western bicycling industry is facing a serious shortage.

* In the past decade China has gone from being a net exporter of oil to being the second largest importer, after the U.S.

* The middle class is the fastest growing market segment in the country.

* In the next 25 years, some 350 million people are expected to migrate from the country to take jobs making shoes, TVs, cars and bicycles.

Not bad, especially for a communist country. Let's look at that in more detail. According to Nicholas D. Kristof writing in the New York Review of Books, the communist dynast)" is collapsing. Their communist leadership is despised and, seeing the handwriting on the wall, some hardliners are trying to open the government to the people. "We should admit our mistakes to the people and to history," one of the party's foremost leaders, Li Ruihuan, was quoted as saying. He has also suggested that China hold free elections to elect leaders up to the provincial level.

Writes Bruce Gilley in his new book, China's Democratic Future: How Il Will Happen and Where It Will Lead: "China did not achieve political pluralism, but it did move: toward economic pluralism. China now has seven thousand newspapers or magazines, five hundred publishing houses, three thousand TV stations, 250 million mobile phone users and 70 million regular Internet users."

To paraphrase Gilley, "The Internet has been extremely powerful in the proliferation of public forums where people share ideas about the failings of the government. Christian 'church houses' are thriving without government intervention."

Obviously, these are all good things. But lest we get too excited, the trend away from communism has been matched with a rise in nationalism. China as a nation is finding its place in the world and is more and more openly hostile to other countries, especially old enemies like Japan. One has to wonder and worry about were this will lead.

So, where will it all lead? I am not going to even pretend to know. But here are some ideas we need to consider when thinking about a world economy. First, through its sheer size China is a tempting target. Yet we need to realize that China is not only the world's workshop but also becoming its largest consumer. While this will probably be very good for business, in the near-term it could pose tremendous problems (read: shortages) for the rest of the world. Oil, aluminum, cement, steel: all those people consuming all of world's resources in such a short time is distressing.

Still, there are positives. Today's Chinese leaders appear to care much more about human rights. Like all good economic leader wannabees, they have come to realize that a failure to behave will force the rest of the world to shun them. In recent months we have seen clear evidence of more stringent--and better-enforced--patent infringement laws. The economic reality that China is coming to see is that knocking off others' products will cause them to lose contracts to produce those products. They are being more careful.

Finally, the Chinese are realizing that in order to be considered a player on the world's stage they have to assume true social responsibility. For instance, in the past couple of years in China I have seen significant environmental improvement.

This is why I've had China on my mind. There is a lot to ponder, a great deal to process and a hell of a lot of changes coming to our small planet.

These are exciting times, aren't they? What do you think is going to happen?

DAN BEAULIEU is a founding partner in D.B. Management Group (dbmpcb.com). He can be reached at 207-873-0793; [e-mail]. His recently published book, Printed Circuit Board Basics, is available from UP Media Group.