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No. In fact, China’s most severe risks are ecological—particularly its environmental problems and its vulnerability to communicable disease. Of course, this is not to say that China has no economic problems. No country is immune from the normal business cycle, and China today is subject to both inflationary and recessionary risks. But Beijing is developing the fiscal and monetary tools to regulate the economy so as to prevent these problems from becoming catastrophic once they emerge.

In contrast, China’s ecological and health risks are far more serious than people realize. Air pollution in China is affecting the quality of life in cities like Beijing, Hong Kong, and Shanghai, among others. The risk of water shortages, both in agricultural areas and major cities, is high and growing; only 1 percent of the surface water available to Shanghai is safe to drink. In one harbinger of things to come, an explosion at a chemical plant in northeast China in November 2005 sent a benzene slick cascading down the Songhua River. Millions of people in the large, industrial city of Harbin were without water for a week. The probability of more acute environmental crises resulting from chemical spills or toxic emissions is high. The Chinese government is already warning that the country’s emission of carbon dioxide and...