The Tycoon Report

Get Ready for China.

How will the likely rise of China affect me both as an American and as an investor during the next 5, 10 and 25 years?

That's a question I've been asking myself seriously ever since it was reported that the Premier of China, Hu Jintao, was in Latin America three months ago. Normally a trip like this would barely make page nine of a serious American business paper. But this time was much different.

This time news that the Chinese were here hunting for natural resources was featured prominently across the front pages of almost every daily in the country. "Un-named" government sources sounded suprised that the Chinese had the moxie to be "cutting deals in our own backyard." I remember being taken aback at the subtle vitriol.

Much has happened since then. For starters, the U.S. and China have been engaged in a very public tug-of-war over the value of the Yuan. I emphasise "public" because the Chinese need to keep their Yuan low in order to keep growing, and the U.S. needs China to keep growing to finance our deficits.

In other words, most of what you hear is just noise to play for domestic audiences. For change to really happen, China will have to decide to stop growing, or the U.S. will have to get its fiscal house in order and stop borrowing. Neither scenario is likely.

And then last week, the "big" news came. The Chinese state-owned oil company, Cnook (pronounced: "C-Nuk"), shocked Washington by trying to leapfrog an agreement between Chevron (SYM: CVX) and Unocal (SYM: UCL) to merge.

Looking back, it shouldn't have been surprising. China wants an American oil company whose main reserves are in Asia, and they were smart enough to hire Washington lobby firms and Wall Street advisors to get it.

As surprising as it initially was to hear, most people are OK with the Chinese playing the game by the rules we've invented.

But it's not the Chinese playing the game by our rules that has many concerned. It's the possibility that China's sheer size can one day CHANGE the rules of the game that concerns people.

And for a country that leads a world that is "American-centric," the thought of China becoming an equal - or superior - economic or military power may require a major paradigm shift in our thinking. IF IT HAPPENS AT ALL.

I say "if" because it is NOT a foregone conclusion that it will indeed happen. Far from it. In fact, most of the people who project China's future project it using a growth line that goes straight up. But the road of history is littered with examples of countries who came out of the gate strong only to fizzle when the government couldn't adapt. We just don't read about them in most history books because history, as we all know, is written by the winners. So, over the next several weeks, we promise to take you further inside China than you've ever been.

We want to know:

How does China really see America? What makes her tick? How does she view her place in the world? How hungry is she to take her place on the world stage? What is important to her?

To answer these questions properly, we're going to take you deep inside the country and show you what the Chinese phenomenon looks like from the perspective of a young American businessman currently visiting China, Wayne Mulligan.

Wayne is a dear friend of mine. After spending several years working on Wall Street with me, he decided to further pursue his education at Columbia University. In addition to economics, he studied Chinese culture and speaks the language.

As with many young enterprising businesspeople, Wayne sees the long-term potential for business with China. That's why he jumped at the chance to study there. He arrived in China approximately two weeks ago.

When I proposed the idea of his contributing a weekly diary for you, our readers, he was thrilled. He believes, as do I, that information is the difference between the "haves" and the "have-nots." With that in mind we will do our very best to inform and educate you in the coming weeks.

Have a great 4th of July...