China’s prominence is rising in the high-tech world on a variety of fronts as China’s Alibaba.com has enjoyed a massive 340 percent gain in net profit tied to China’s fast-growing economy. The number of unique visitors (as of October 2007) is second only to the US (yes, China’s large population has helped), however, their presence is being felt all around the world from World of Warcraft users having to sell their characters at a cheaper rate to compete with the Chinese ones to within China as homegrown sites such as TenCent, Baidu and Sina all reach more native Web surfers than Microsoft, Google, or Yahoo.

Nonetheless, one should be careful to equate fast growth, large numbers, and impressive actions with that of how China will overtake other first world nations in the near future. Strong growth now, does not mean it will continue to do so in the future.

Even more so, one should always be careful about making predictions of country growth with innovation and new tech centers. A new book called Silicon Dragon by Rebecca Fannin notes:

It’s going to be years before it becomes very pronounced, but China is slowly emerging as the next Silicon Valley.

If you look at venture capital money flowing in, it’s a phenomenal rate. China has been the fastest-growing target for venture capital in the last four years: far faster than anywhere else in Asia or the U.S. or Europe.

Venture capitalists used to say they’d never invest outside a 30-mile radius of their offices. Now VC firms like Sequoia Capital, Kleiner Perkins Caufield & Byers, and Accel Partners are all focused on China. Virtually all of the major venture capital firms in the U.S. have teams and funds there. It’s been a huge shift. And for every startup that’s funded in China, there’s a startup that’s not funded somewhere else.

Yes, the growth and money put into China has been tremendous, but if its going to be years in the future, we can only imagine how long China’s growth and strength can last. The Asian Tigers were seen as phenomenal and Japan itself was seen as going to overtake the US back in the 1980s, but as we all saw, some fundamental economic instabilities became too pronounced to avoid leading to stagnation within.

Keep in mind one important point from all this:

We have to ask: what innovation has the new China produced already? [B]eing a manufacturing powerhouse is quite different from actually [originating] the products, let alone inventing novel ones.

In other words: Look beyond how fast the growth is, beyond how much money is being invested, but dive into how stable is this system? Is this growth based on sound principles? Is the country able to adapt to economic downturns? Are there any intrinsic problems that will prevent future growth during the hard times? Lastly, what is actually being created and not just mimicked?