Small wonder the Chinese news agency was on gloat mode during the week of Aug. 8. The U.S. stock market fell off a cliff, bounced briefly, and then fell again. The Federal Reserve admitted the economy is close to stalling. And in China? Oh, just the usual. Exports surging to record heights, that sort of thing.

At first sight, recent events have exemplified the great shift from West to East that is the biggest story of our time. Even before the odds of a “double-dip recession” shot upward, the International Monetary Fund was forecasting that China’s gross domestic product would overtake that of the United States by 2016. And as everyone knows, China is now America’s biggest foreign creditor.

And yet, in several weeks of traveling through China, I’ve found myself wondering if Beijing is tempting fate by so openly relishing America’s current misfortunes. Apart from a few days in Beijing, I’ve eschewed the favorite destinations of Western visitors. I’ve been to Yanan, where Mao established his grip on the Communist Party in the 1930s, and where people in outlying villages still literally live in caves. I’ve been to Xian, to see the burial place of Qin Shi Huang, the first emperor, who hammered China into a single Middle Kingdom more than two millennia ago.

I’ve sweltered in Chongqing, the exponentially growing mega-city far up the Yangtze. I’ve choked on the dust of Changsha in Hunan province. And I’ve stifled in the muggy air of Hefei in Anhui.

I spent a night at the Pig’s Inn in Bishan, a sleepy village in southern Anhui, where time appears to have stood still for 100 years. Bishan is the exception. Everywhere else, the Chinese seem intent on cramming a century’s worth of industrialization and urbanization into about 30 years.

The bald statistics are startling. While the West stalls (and Japan slumps), China’s current growth rate is just under 8 percent. Industrial production is growing at an annual rate of 15 percent. Capital investment in dollar terms is now greater in China than in the U.S. And last year the value of initial public offerings on Chinese stock markets exceeded that of IPOs in New York by a factor of 3.5.

The social consequences are also amazing. According to Credit Suisse, a third of the Chinese population now have wealth of between $10,000 and $100,000, compared with less than 7 percent of Indians. More than 17 million Chinese have wealth above $100,000. There are 800,000 millionaires here and 65 billionaires.

And yet … A closer look at the Chinese economy reveals that an astonishingly large part of what is going on today is investment in urban residential real estate, which is growing at more than 25 percent a year. The evidence was all around me as I drove through my sample of Chinese provinces. On the outskirts of every city I saw, there was a veritable forest of apartment blocks under construction.

These are the fruits of China’s own stimulus. When the Western economies first tanked in 2008–09, China’s communist rulers ordered the country’s banks to lend, lend, lend. The biggest borrowers were property developers and local governments.

With inflation above 6 percent and the stock market down, the new Chinese middle class has gotten in on the act. An unknowable proportion of these new apartments have been bought as investments by people who already own one or more. With new-property prices up about 20 percent in just two years, who can blame them?

Sound familiar? Yes, this looks a lot like a real-estate bubble—with Chinese characteristics. As for debt problems, Chinese bank loans were 97 percent of GDP in 2008. Now they’re at 120 percent.

All of which makes me wonder if China’s recent gloating at our misfortunes might just prove a tad premature.