EVER SINCE ATTILA THE HUN and his Asian hordes swept across Europe in the fifth century, Westerners have looked east, only to freak themselves out. Kaiser Wilhelm II saw a "Yellow Peril," Joe McCarthy saw the "Red Menace." Americans in the mid-'80s saw an "Asian Invasion" by Japan, Inc.

Now America's press and politicians are sounding the alarm over China's rise as the world's other superpower.

On the economic front, China's $2.26 trillion economy, now the world's fourth largest, is growing at a scorching rate of 10 percent a year, lifting regional economies and driving up global prices for oil, steel and cement. With this new clout, China seems more willing to throw its weight around, like threatening to veto U.N. sanctions against its oil suppliers, Iran and Sudan.

Many of China's critics used President Hu Jintao's recent U.S. visit to itemize Communist China's multitude of sins, but few have done it more exhaustively than Rep. Nancy Pelosi (D-California), who argued that Hu's government "brutally crushes freedom, democracy, and the religious expression of the Chinese and Tibetan people. This is the same regime that provides military technologies to countries that threaten international security."

Pelosi also points out that the U.S. trade deficit with China has grown in the last decade from $4 billion a year to $4 billion a week, and that China owns a large chunk of the U.S. national debt. "Countries such as China that own our debt will soon not only be making our toys, our clothes and our computers, they will be making our foreign policy," said the House minority leader.

A certain amount of fear is a natural response to real threats, but some of the scary talk sounds almost xenophobic or paranoid in nature. How well founded are these fears about China? Let's take a look.

"China's economy is about to overtake America's!"

FEAR FACTOR: 9
REAL FACTOR: 4

The Chinese economy is growing at a rate roughly three times that of the U.S., which according to some projections would mean it could catch up in less than two generations (a blink of the eye given China's 5,000-year history). Columbia University economist Jeffrey Sachs advises Americans to prepare for a world where by 2050, China's economy could be 75 percent bigger than their own.

While that might sound frightening to many Americans, the extreme alternative—the bursting of the gigantic China bubble, or a political and financial collapse of the Middle Kingdom—would be far scarier. Even a stalled Chinese economy would put tremendous pressure on U.S. treasuries, the U.S. dollar and U.S. markets across the board, to say nothing of the empty shelves at Wal-Mart and every retailer in the country.

Even among the biggest China-bashers, there's a certain acceptance that U.S. and China are deeply co-dependent. China is now the second largest holder of U.S. debt behind Japan. Last year, the U.S. trade deficit with China reached $202 billion, prompting nervous lawmakers to once again consider protectionist measures that would force China to "play fair." They cite China's apparent manipulation of its currency to keep its exports cheap, and its weak record of protecting intellectual property rights (especially for DVDs and software).

But protectionists don't readily acknowledge that China ultimately saves American consumers enormous amounts of money. Economist Gary Hufbauer of the Institute for International Economics estimated that, all in all, U.S. consumers have saved about $150 billion as a result of low-cost Chinese manufacturing—a sum not so far off from the U.S.-China trade deficit tally.

"The Chinese juggernaut cannot be stopped!"

FEAR FACTOR: 9
REAL FACTOR: 5

China's progress is not unlimited. There are downsides to China's boom: pollution, worker safety, and other issues that could threaten the country's forward momentum. The gap between rich and poor has become so great that even members of the Chinese elite are questioning the ruthless path the country has undertaken. Like America before it, China has its own real estate and stock market bubbles, with warning signs flashing a less-than-lucky red.