Chinese and U.S. flagsFew items inspire bipartisanship in Congress like China. Democrats and Republicans like to shelve their differences to bash the emerging giant instead. And as President Hu Jintao met with President Obama in Washington, D.C., this week, both sides are out in full force.

Democratic Senate Majority Leader Harry Reid and Republican House Speaker John Boenher, for example, skipped out on a state dinner for Hu. Democratic Senator Chuck Schumer again accused China of stealing American jobs, while Republican Representative Dana Dorhrabacher went as far as calling the Beijing government a "gangster regime that murders their own people."

The grandstanding and theater is understandable enough for politicians facing an electorate battered by the Great Recession. China offers a convenient scapegoat for America's many woes.

More Than Just Exports

But investors would be wise to look past the heated rhetoric. While politicians in the U.S. like to portray it as a burden, China's blistering growth is instead a major factor for the growth in global demand. That helps generate the strong results that companies continue to deliver as earnings season kicks into high gear.

And China isn't about only exporting. Its imports posted an annual gain of $389 billion to total $1.36 trillion in 2010, Jim O'Neill, chairman of Goldman Sachs Asset Management, wrote in a research note this week. Chinese imports amount to 23% of its GDP, compared to about 16% for the U.S.. At $184 billion last year, China's trade surplus actually tumbled to 3.8% of its GDP compared with 11% three years ago.

"Who says China grows at other's expense?" O'Neill wrote.

Chinese consumption tends to get overshadowed by the country's overall growth rate. "The reason why the level of reported consumption seems to be a relatively small share of GDP is not necessarily because the Chinese consumer is repressed," O'Neill wrote. "Rather, it is simply because other parts of GDP rose even faster in the past decade."

Continued Hot Growth Is Likely


While the China growth story should be familiar to investors, its magnitude is stunning nevertheless. China's GDP has expanded to $6 trillion from $1.5 trillion 10 years ago. A decade ago, the Chinese economy was smaller than Britain's. But it has since expanded at a pace equivalent to two British economies since.

As China's accelerating GDP figures on Thursday showed, that growth is likely to keep rocketing.

Judging by consensus nominal estimates -- which include items like the impact of inflation and a 3% annual rise of the yuan versus the dollar -- that would be like creating an economy equivalent to the size of South Korea, O'Neill wrote. "China will be creating another Growth Market all by itself this year."

That kind of growth makes the country an easy target for U.S. politicians. Investors, though, should recognize also consider its impact on corporate profits.

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Robert

Beware of 'GOSSIP" and 'LOOSE LIPS'
Wars are started by both !
China is being 'Bashed' by the Waring crowd . We have enough of 'dead' young men and women . This is not the way to prosperity ---Over daed bodies !The Chinese
were smart enough to invent explosives before our time . We Americans get carried away with ancient historical facts being 'twisted' to suit ambitions of a few .
1. warping minds in the name of Christianity !
( Fanatical groups and the major religious establishment trying to win souls )
2. War hungry establishments , mindless of losing bloodied bodies .

January 21 2011 at 10:13 PM Report abuse rate up rate down Reply
2 replies to Robert's comment
Bruce

Trade with China is not "free trade" because China is not free: Don Trump Favors "25% Tax" on Chinese Goods http://alturl.com/dwn2c

January 21 2011 at 9:35 PM Report abuse rate up rate down Reply
Bruce

Trade with China is not "free trade" because China is not free: Donald Trump Favors “25% Tax” on Chinese Goods http://alturl.com/dwn2c #tcot

WE NEED EQUAL TRADE, NOT "FREE TRADE!"

January 21 2011 at 9:33 PM Report abuse +1 rate up rate down Reply
1 reply to Bruce's comment
perleyx

China owns us due to our inability to reduce our debt. American companies are flocking to China due to cheap labor. What is the point of bashing China? If you can't beat them, join them.

I cook Chinese food most of the time at home. I can offer Chinese cooking lessons for anyone. We might as well get used to it. Our President is no longer Obama, it's Hu.

January 21 2011 at 6:17 PM Report abuse +3 rate up rate down Reply
rgkarasiewicz

"Investors should look beyond China-bashing". I agree. We should bash the investors.

January 21 2011 at 5:15 PM Report abuse rate up rate down Reply
hi mick

peace with china,count your blessings, they have a great leader, only fools bad mouth them,is every thing 100% of course not . when some one extends ther hand .there are not many frinds left.

January 21 2011 at 1:46 PM Report abuse +2 rate up rate down Reply
acpward69

I agree with this, every business in the US should be looking to capitalize on this. They need goods and services and do not need to waste all their time inventing the wheel. Every dollar makes them a safer country to deal with.

Also lets dig in to Brazil & India,

Now these countries are going away only getting bigger.

We could see an entire new alingement, US, India, China, Brazil - safety in number.

God Bless America

January 21 2011 at 12:57 PM Report abuse +4 rate up rate down Reply
bohemianacres

Politicians bashing China reminds me of the McCarthy Era. To get the monkey off their own mistakes and lack of foresight in legislation, politicians resort to name calling and using emotional hate words for that period of time. Such as: jobs is the number one problem so a hate word like "outsourcing" is used to get the troups up in arms. Hindsight is always 20-20. Politicians do not want to face the fact that healing a wound takes a lot longer and is much more agony than when the wound is inflicted. Getting the jobs back to the U.S. so Congress and the States can tax the U.S. wage earner to death with medicare, SS, and regular taxes, not to mention union dues, will take a lot longer and there will be much agony along the way. In the meantime, I thank China for pointing out the wound. China exploited the situation and their growth in global economy proves it. Now will our Congress recognize the error of their ways and do something about it. I have my doubts.

January 21 2011 at 11:45 AM Report abuse +3 rate up rate down Reply
1 reply to bohemianacres's comment
proway2

I remember a study in 1970 or 71 that built the case for why China and India with there population would become (and possibly surpass the US) a world economic power. Russia was also discussed because of their resources. Our political leaders were forewarned that these events were going to happen. We should start playing in the new game and stop calling foul.

January 21 2011 at 4:11 PM Report abuse +4 rate up rate down Reply
jamestcap

Every time I'm tempted to get mad at China I ask myself if I really want the poverty stricken China of cultural revolution days with its deadly internal politics and talent for fomenting world-wide trouble. Other east Asian countries have moved from dank dictatorships to prosperous, democratic societies, and China seems to be headed in that direction too. I hope it makes it, but even if it doesn't, the country is a whole lot better neighbor than it was half a century ago. And when you're a giant with a fifth of the world's population, that's important.

January 21 2011 at 10:33 AM Report abuse +6 rate up rate down Reply
dajandh

HARRY REID SHOULD TRY THINKING BEFORE HE SPEAKS,REMEMBER HIS COMMENTS DURING THE IRAQ WAR,JUST STUPID,HEY HARRY HOW MUCH ARE WE IN DEBT TO CHINA?I GUESS YOU FORGOT,YOU MUST HAVE BEEN TALKING TO A UNION THAT HATES CHINA WHEN YOU MADE YOUR COMMENTS.DO THE COUNTRY A FAVOR AND KEEP THE PIE HOLE SHUT!

January 21 2011 at 10:08 AM Report abuse +3 rate up rate down Reply