Last week, we posed the following question: "Will China help our struggling economy?"

At that time we commented that: "Some investors have the idea that China's economy is very strong and that it is boosting our U.S. economy." In conjunction with this, we pointed out that we had issued a "Sell Condition" on the Shanghai Composite back on April 26th, and that the Shanghai has been moving lower ever since that day in April.

Still, the perception in many countries is that China is trying to help them out of their country's problems.

Are they?

Here are some of the events that have been transpiring relative to China and other countries:

- China's National Machinery Industry Corp. (Sinomach), is negotiating to buy 50 square miles of land close to the Boise Idaho airport. Rumor is that they plan to create their own city centered around manufacturing, trade, and technology businesses.

- China's CNOOC energy company is buying a multi-billion-dollar position in 600,000 acres of South Texas oil and gas fields. (CNOOC is a State-owned Chinese entity.)

- On Monday, the CNOOC announced that it would pay up to $2.2 billion for one-third ownership in Chesapeake Energy assets.

- China made 14 commercial investments in Greece this week. They are currently doing deals (buying) in Greek telecommunications, real estate, and shipping industries.

- Even Hungary is a buying target ... China is now interested in the Malév (Hungarian national airlines) and the Hungarian national railway company known as MÁV.

- Currently, it is estimated that China now controls over 90 percent of the total global supply of rare earth elements.

Two weeks ago, many were thinking that China was a "wonderful new benefactor" that was interested in "saving them". Now, some in the press are starting to use words like "land grabbers", and "resource xxx".

Familiarity breeds contempt?

As the concept of a "Chinese country that helps others" is starting to wear off, old wounds are starting to re-surface.

In the U.S., we lost about 50,000 manufacturing jobs a month to China since 2001. Our economy has slowed down during the past few decades and is now in trouble ... theirs grew 2700% in the past 20 years. Trade-offs we made years ago are becoming sources of regret and anger by some.

Years ago, the Pogo comic strip wrote these famous words: "We have met the enemy and he is us".

How so? If you look at China, their average debt load per household is 17% of the average household income. Their citizens have room to acquire goods and services for some time without getting overloaded to the point where they are frozen in place without the ability to buy much more. On the opposite side of the equation, we were at that place once upon a time ... but now, the average U.S. household debt load is being reported as 136% of the average household income.

What does this have to do with investments?

The events depicted above are seeds ... seeds being planted into what could emerge as some kind of protectionism movement. During the 1929 Depression, Congress passed the Tariff Act of 1930 which was an example of protectionism. Protectionism is a defensive reaction ... and when initiated by governments, the results can often be very destructive. Defensive actions during the Depression caused a severe reduction in U.S. and European trade. Many people now look back and say that it had helped to spawn the start of the Great Depression ... and that, is the unfavorable link to investments.