Echoes wrote: "The gentleman also suggested that China might not suffer much even if the US stops Chinese imports. His point was that China had now identified a solid consumer base in the country itself, and was soon going to be a self-supporting economy in case of a sudden pullout of the foreign investment. So I guess my question to the experts is if that is really the case. What will happen to China if, lets say, the West stops buying the cheap Chinese goods? Is there a substance to what seems to be a rapidly inflating Chinese economy" Hey, I am no expert, but your questions are fairly elementary, so here is my opinion. I think, unlike the gentleman you mentioned, if tomorrow, US and Europe were to stop importing from China, that would be catastrophic to its economy. The Chinese economy would crumble down very quickly. FDI in China would dwindle substantially. But then, again, it is highly unlikely that the US and Europe would stop buying cheap products from China for a number of reasons, among which, one is: these cheap products, and because they are affordable, are helping people in those countries enjoy high quality of life, and keep down inflation. China is already the third largest trading nation in the world - behind US and Germany. The volume of its foreign trade exceeded one trillion dollar this year. Actually, China's foreign trade has never been so crucial to its economy than it is today. China's exports account for a significant part of its GDP. China's economic prosperity, for now, would be highly affected by its foreign-trade. Also, China's economy is dominated by a handful of SEZ(Special Economic Zones). For instance, Shanghai and Shenzen alone contributes for more than half of China's total foreign trade volume. Most of the businesses operating in those areas are joint-ventures, and are fuelled by foreign capital (FDIs). With abundant supply of cheap labor, China has become the most preferred source of manufacturing and/or processing for a lot of foreign companies. *Incidently, China, last year, was the largest receipant of FDI in the world, displacing the US from the top place for the first time. As impressive as China's trade figures are, much of its international trade are done by foreign companies operating out of China. Remember, China is still a poor country, and despite its mammoth population, its economy is still relatively small in dollar terms- which stands at $1.4 trillion, compared to US-$ 12 trillion and EU-$ 12 trillion (rough figures). Chinese per capita income is a paltry $1000. Now, compare that to the US per capita income: $38000. Bottom line: The consumer base is growing fast in China, but not quite there yet. But I am quite confident that the situation would be different in the next 15 years. Disclaimer: the figures are just my estimates.