Yet, while the Wal-Marts and other mega-retailers have turned China into the world's factory and changed the face of US consumer patterns, there is a case to be made that the changes these retailers are forcing in the mainland's economy will have far greater economic and political significance in China than anything seen thus far in the United States.

Wal-Mart and competitors' reactions to Wal-Mart in China are altering retail offerings and consumer habits. But the real change in China's economic system may have already occurred - thanks to these mega-retailers and the country's reliance on them as conduits for exports. US retailers, through their massive buying power and commanding presence as China's greatest job creators, have moved the mainland's economy towards the maximum market freedom of the Anglo-American model favored by past leaders Jiang Zemin and Zhu Rongji. The economy under the past leadership has developed with US characteristics and is nowhere near the European-controlled consumption model that China's new leadership embraces.

This difference in free-market models is not insignificant. For as central government leaders attempt to bring China's economy to a soft landing, there may well be a risk that the economy they want to tame is not the economy they need to tame. The US model does not respond well to the blunt force of economic constraints that the current Chinese leadership is trying to apply. Controlled slowdowns in a market economy are difficult enough. In a transitional economy such as China, using state control levers to try to blunt free market actions holds no history of success. Even worse for Beijing, in an export-driven economy, if control over exports is ceded, as it has been in China, is it possible to slow the economy when the largest driver of investment and employment is left unfettered?

Not far into a March 2 Citibank report on container shipping, analyst Charles De Trenck makes a rock-solid case that more than 25 percent of all merchandise exports shipped to the United States are destined for Wal-Mart alone. Anyone who has seen the Wal-Mart machine up close has little reason to doubt 2.8 million of the 11.3 million TEUs (20-foot equivalent units) that went from China to the United States ultimately ended up on Wal-Mart shelves. Yet, it is when we add up the shipments of the other top US retailers such as Target, Sears/Kmart, Home Depot and Toys R Us that we learn that five large US retailers control slightly more than half of all ocean merchandise shipments from China to the United States. What is the counterweight to the US retailers having their way with China? Will these five companies cease competing in their home markets in order to allow China to slow its economic growth?

In a highly competitive market, where a factory in Guangzhou has to battle with a factory in Shanghai, rather than a once high-cost factory in the United States, the margin pressure placed by foreign retailers falls on the factory owners, workers, and in the end, China.

To fight this margin squeeze, investment is an exporter's only tool. To increase productivity and hold margins, exporters must invest. To move up the value chain, investors need the freedom to invest in new areas. To employ millions of workers in China's heartland, expansion must happen. To address the worker shortage along China's export-driven coast, wages must be increased. Can China force these export investments to stop? If not, then how does China address other sectors that support its export machine?

No example better illustrates the state-versus-market battle to slow the economy than the central government's efforts to strong-arm Australia's mining giant BHP to lower shipping rates on raw materials that were purchased in the open market. By what successful economic logic does China enter the open market yet seek to control pricing through political pressure? An extension of these state-controlled moves can be seen in attempts to slow property speculation by decree, restrict luxury good purchases and place pressure on regions to slow infrastructure spending. The state's levers are many, but is China's pressing of one area simply inflating another?

China has a strong record of economic growth and holding inflation in line with that growth. But if the cheap labor and raw materials are no longer under state control in the export sector, the question one might ask as China makes a transition to a free-market economy is not whether China can cool its economy, but whether Wal-Mart will let it.

Mark Simon is a media executive and chairman of Republicans Abroad in Hong Kong