BEIJING - While American voters were finally giving President George Bush and his southern-fried Republican Party a richly-deserved, long-overdue drubbing, I was off in China observing a nation that while rigidly authoritarian, is at least governed by capable, intelligent leaders.

The same, alas, could not be said of the Bush Administration's neocon ideological crackpots, dim-witted rural legislators, and evangelical religious extremists who saddled America with two lost wars, now costing over $8 billion monthly, monster budget deficits, and the intense dislike, if not downright hostility, of people around the world.

Here in Beijing for my umpteenth visit since 1975, I've seen the future, and it still says, 'made in China.' In all my decades of travel and reporting, China's transformation from Maoist gulag to economic powerhouse is by far the most awesome event I have ever witnessed.

This gigantic metropolis of 25 million seems destined to become the world's new capitol city - provided China's economy, still surging at over 10% per annum, remains strong, and political stability continues. But once China's surging growth slows, or comes to a halt after a financial crisis or political upheaval, the rest of the world risks being hit by a major financial and trade crisis. So we must not let China euphoria and greed overcome what should be natural caution and prudence in dealing with this new colossus.

Beijing's massive new skyscrapers, huge government blocks, broad, traffic-clogged avenues and miasma of smog and dust give it the look of an imperial capital in a science fiction film.

Last week, China staged a grandiose summit for 48 African leaders summoned to Beijing to receive $10 billion in aid from China's new leader, President Hu Jintao.

Energy voracious China now gets 30% of its oil from Africa. Angola just passed Saudi Arabia as China's leading oil supplier. China is bent on securing the lion's share of Africa's supplies of oil and other strategic resources. China-Africa trade has surged 30% to $50 billion in 2003. Interestingly, during the height of the Cold War in the late 1980's, the Soviet Union tried the same strategy, but was thwarted by the CIA and South Africa.

China's non-interference policy in foreign affairs means its trade and aid come without strings, a major plus for authoritarian or boycotted African regimes. But at least China is not hypocritical. While Washington boycotts Sudan and Zimbabwe over human rights, it cosies up to other African nations like Egypt, Morocco, Algeria and Tunisia that are routinely accused of serious violations by international rights groups.

The summit was a lavish spectacle, with convoys of bigwigs in armoured limousines racing down the avenues, dancers, drummers, acrobats, small armies of tough security details, and regiments of China's feared, ramrod-straight paramilitary police, the Wujing, scowling at everyone. Algeria's secret police - who enjoy torturing victims with electric drills and blow torches - took first prize for looking sinister.

This week, China announced a third quarter trade surplus of US $102 billion. Beijing's monetary reserves have finally topped US $1 trillion, surpassing the former cash king, Japan. Much of China's reserves remain in US dollars. Beijing continues to finance America's spending binge by lending it billions, and keeping its reserves in dollars, though their value is under increasing pressure as the dollar threatens to further weaken. Communist China, in effect, continues to prop up the capitalist dollar in the face of growing pressure for its devaluation.

China's mammoth trade surplus, and a rising flood of foreign investment, has swamped the nation's banks with cash. This, in turn, has fuelled indiscriminate speculative investments, particularly in real estate and factories, and ignited a gold rush frenzy that often obscures China's solid economic achievements.

This flood of hot money poses a serious danger. Indiscriminate investment leads to overproduction, which then causes a deflationary crisis that could end in financial meltdown. Japan experienced similar phenomena in the 1990's, provoked by the sudden collapse of its wildly over-heated property market.

China's government has been struggling without much success to restrain this investment dragon. Beijing refuses, however, to allow its controlled, seriously undervalued currency, the yuan, to float, as its trade partners keep demanding.

The undervalued yuan has given China its huge surplus, the motor of growth that has pulled the nation out of poverty. China still needs to deal with hundreds of millions of struggling farmers, state industry workers, and unemployed. So it refuses to allow the yuan to inch up by more than 5%.

If the yuan were allowed to float, say Chinese bankers, people would rush to convert to dollars, causing a dire financial crisis that would wreck the fragile banking system.

Anyway, argue Chinese officials, why should China pay the price for America's profligacy in refusing to save and running huge government deficits by revaluing the yuan?

America's Treasury is printing too much money in order to keep America's debt-ridden economy growing. Since 60% of all US dollars end up abroad, the Bush Administration's reckless spending and over-stimulative money policies have caused a dangerous world-wide cash flood and serious imbalances to the global economy.

Who would have ever imagined that it would take Chinese loans to keep the US financial system from imploding?

US Republican who idolize free enterprise would do well to take pointers on capitalism from China's Communists who have beaten the western devils at their own game.