Last week a Tibetan mastiff was flown into Xian airport in central China, where it received a welcome fit for an emperor. The dog was swept into town by a convoy of 30 Mercedes-Benz cars. Tibetan mastiffs are a rare and noble breed – and the pampered pooch had cost his new owners Rmb4m ($586,000, €402,000, ￡351,000). Reporting the story, the China Daily newspaper commented nervously that such an extravagant display of wealth might “heighten tension between rich and poor”.

This shaggy dog story is just a particularly weird example of the new wealth of modern China. When I last visited the Pudong district of Shanghai, in the mid-1990s, it was a ramshackle area of factories and warehouses. Last week, I found it transformed into a forest of neon-lit, modernist skyscrapers. China has shrugged off the global recession and should grow by 8 per cent in 2009.

This year the country has passed a number of economic milestones. It is now the world's largest exporter, surpassing Germany. It is the world's largest market for vehicles, surpassing America. Its foreign reserves, the world's largest, are now over $2,000bn. The biggest landmark of them all – the moment when China becomes the world's largest economy – is getting closer. Goldman Sachs famously predicted a couple of years ago that China would hit that target in 2027. But that was before the financial crisis. If America is now set for a long period of slower growth, the big moment could come rather sooner.