Tucson, Arizona (Joe-Duarte.com) Standing under the majestic shadow of the Tucson Mountains watching the sun rise above the Sonoran Desert in Tucson Arizona, a thoughtful, well traveled, internationally connected businessman shared some frank and sobering thoughts with us.

The China phenomenon is a cultural phenomenon which is "scary" and of which many Americans are completely unaware says a high ranking U.S. corporate executive who spoke to us this weekend.

This rather energetic fellow hails from the Northeast U.S. and was speaking to us strictly on background. But he has personal experience in doing business with China and he told us that Americans don't really understand the Chinese phenomenon, a fact that concerns him on a macro level, when it comes to more than business.

His company is middle sized conglomerate which operates in multiple sectors, including defense and medical equipment, about which we'll be writing shortly. But first, the China story.

Familiar readers know that when the China story emerged, we were in the wrong camp. We thought that China was a bubble that was going to burst and that social unrest would likely ensue. We still think that this is within the realm of possibilities.

The problem with China is twofold. One, it is so big, and its population is so large that no one can really grasp what China is. In other words, what may hold true for one area may not hold true for another, economically speaking. Yes, there are empty buildings in China. And yes, they are building more of them while property prices continue to fall.

More important is the issue that the current Chinese middle class has never experienced a down turn in their newly gained wealth.

Yet, what this executive told us is that in China, the major cultural characteristic is the search for academic excellence. Children don't spend Saturday mornings playing soccer or football, or tennis for that matter, which is what brought this scribe together with this executive.

He says that in China, the workers take pride in their work, and that if the product isn't what it is expected the workers face extreme circumstances. He also says that the products from China, aside from being less expensive, are "very reliable" and of "high quality."

He told us that when a Chinese executive visited his U.S. offices, the Chinese executive was shocked at how American children have leisure time and that it is encouraged by the parents. In China, according to what the Chinese executive told our new friend, children spend their free time trying to gain an academic edge on others.

On his company's business, he said the medical equipment components business is solid and that the economic downturn never touched it. He says defense is as cyclical as it is reported and that it is well accepted in the business that Democrats will cut defense spending while Republicans will increase it. He also says that currently defense is a poor bet.

To be sure, this is one man's opinion, and it can be argued that it based on his own personal experience. One could argue that this businessman and his company are partially to blame for the outsourcing of U.S. jobs to China, and for perhaps creating and fostering the vulnerability of the U.S. to China's continuing expansions.

It can also be said that even if these observations are correct, you have to take events as they are. China is growing. It is expanding its reach on multiple levels. And it sees America as soft, a land where children play games instead of learning how to be educated. And a land where partnerships with American companies are just one more step inside the door to a huge market, and a huge amount of wealth that is there for the taking.

And both of those concepts are coexisting, and are self evident, despite what anyone tells you.

With regard to the Tucson economy, this time around is a bit more lively that last year at this time. Restaurants are like in other cities, we've visited, fairly full at dinner time. Except this time around we did see some waiting lines.

Our hotel, a Hilton property is spending money on remodeling. The dining room, which is upscale was moderately full for breakfast, lunch, and dinner. And it seemed to be fully staffed.

Last year, there were areas of the city that we visited that seemed to be in worse shape than they are now. Not all businesses have fared well over the last few months. One restaurant where we had dinner last year, which was full, went out of business.

Compared to last week's visit in Waco, Tucson stacked up well. It was certainly more lively than what we saw in San Antonio two weeks ago.

The tennis juggernaut goes on. According to the director of our current tournament, the Tucson Regional, there were more frequent than usual last minute withdrawals from the tournament. Some of it was weather related. But other people we spoke to said that tournaments in Florida and Palm Springs had also experienced last minute withdrawals.

We're still trying to work this out but we thought it was interesting, especially if the economy, which otherwise seems stable had something to do with it.

Conclusion

Our conversation with a well placed businessman was clearly an eye opener. China will likely stumble. But, unless something significant happens, a stumble won't be more than a blip.

The U.S. may not fall from the number one position for some time. But, unless some signficant changes take place, life could get very interesting in the next five to fifteen years.

When you understand the big picture, the next step is how to survive and profit from what lies ahead. That's why we recommend: "Market Timing For Dummies." and "Trading Futures For Dummies." The Trading Manuals for All Seasons. Also Available As Kindle Books.