There's no doubt it would hurt China, but not as much as the US. China is a very patient culture, and that is one of the big differences. They view themselves as the extension of a culture that is thousands of years old, and has overcome countless other crises over that time. They know that they'll recover, even if it takes 20 or 50 years. The US doesn't have the patience or ability to wait that long. The US also doesn't have the manufacturing infrastructure that it used to have. Tooling from whole factories have been shipped overseas. If the US economy went into the toilet where will the money for new capital investment come from? It ain't cheap to start up manufacturing.

Yes, Europe would hurt too, but not anywhere near as bad as the US. One of the likely responses to a drastic devaluation of the US dollar would be the emergence of the Euro as the new world standard currency. Continued integration of the former Eastern Bloc countries into economic and political union will create new markets for cheap consumable goods made in China. All China really has to do is alter their supply chains in order to ship more to their West than to their East.

Why did this happen? Because it was "good for business". We apply western thinking when we say "China will never do that, it will hurt them too much". We have to learn to view the world as they see it in order to determine what they will and will not do. I've been flogging this horse for the past year or so. China represents a greater threat to the west than anything else on the face of the planet. An economic catastrophe will do more harm than terrorists could ever dream of doing.

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Jonathan

2011 Mazda2
2000 E320 4Matic Wagon
1994 C280 (retired)