The British government is unlikey to underestimate economic growth any time soon, but thanks to difficulties in collecting data, that's exactly what China has been doing. In 2004, it overlooked $285 billion in output. As the Times of London explains: "its economy overtook Italy's two years ago, has cruised past France and, with the new figures, has also surpassed Britain. That puts China in fourth place, behind the US, Japan and Germany." Goldman Sachs estimates that China will leapfrog the US to become the world's biggest economy by 2035.

Pessimists view the rise of China as deeply worrying. They complain that everything now seems to be made in China. In the United States, Wal-Mart is getting attacked for the crime of selling too many Chinese goods. Such pessimists frown at the knowledge that, symbolically, IBM's personal computer business is now owned by the Chinese firm Lenovo. The worrying is needless: IBM is being profit-maximising: it realised that its capital would be more profitably invested in other business areas, rather than cut-throat PC manufacturing. This is good for America. The truth is that there is no conflict between American prosperity and Chinese prosperity: increases the GDP in one country will tend to lead to GDP increases in the other.

Some people are worried that the rise of China will lead to war. But surely people can't really think that putting China in an economic cage, leaving 160 million people living on less than one dollar a day, is a good way of promoting peace? As both Richard Cobden and Thomas Friedman have argued, economic linkage tends to bind countries together in bonds of peace. The economic linkage of America and Europe with China should thus be seen as a vital foreign policy objective.