Check out this great post by Brad Setser. He examines what he calls three "dated perceptions of China", namely:

1. Crappy banks - Chinese state owned banks are filled with non-performing loans,

2. Externally balanced trade - China runs a surplus with the US but a deficit with the rest of the world, so its trade is in rough balance and finally that

3. A technologically deficient economy - China just assembles imported components with little value-added.

Not so, says Brad. Time to correct those outdated ideas about China.