Sales of Swiss watches to China have fallen by almost 30 percent in recent months, and jewelry sales are plummeting, too. So there can be little doubt the country is in deep trouble.

As the American presidential campaign grinds toward its inglorious end, President Obama and Mitt Romney are both trying to show how tough they will be on China, infuriating Beijing. At the same time, Obama is “pivoting” the military toward Asia, away from the Middle East, obviously worried about China.

But when you look at what’s actually happening there, you have to begin wondering: Should the United States really be so concerned? The country’s situation is grave.

The growth of China’s GDP has continued to slow every quarter since late 2010, and that’s just one amid a myriad of problems. In fact, when Xi Jinping is chosen to be China’s new president next week, he will inherit a state of affairs far worse than Obama’s when he became president almost four years ago. And how Xi handles that will also have a significant impact on the United States.

For example, Cummins, a major American engine manufacturer, says it must lay off up to 1,500 people by year’s end because of soft demand from China, whose problems are ricocheting through the American economy.

But China’s troubles at home are even more daunting ― economic, political, social. And as the government transition approaches, all of it seems to be coming to a head. Some salient examples: Money is flowing out of the state at an alarming rate. Wealthy Chinese have no faith in their state.

Of course, China does not make public any figures. But reliable estimates from journalists and economists published in October place the number between $225 billion and $300 billion over the last year ― between 3 percent and 4 percent of China’s economic output for the period. That is so even though moving significant amounts out of the country is strictly illegal. The outflow is growing larger every year, just as the GDP continues to fall ― not a coincidence.

At the same time, the Chinese people are in open revolt over corruption, poor product quality, land seizures, environmental abuse and so much more ― nearly 500 public demonstrations every day.

Judging from what they’re saying on Weibo, China’s social-media site, Chinese seem most angry about rampant corruption. So last week, when the New York Times reported that Premier Wen Jiabo’s extended family ― school teachers and pig farmers, primarily ― was inexplicably worth $2.7 billion, government censors immediately blocked Web access to the Times. It’s also trying to censor discussion of the story on Weibo.

The situation is growing so bad that Strategy and Reform, one of China’s own think tanks, warned publicly that “China is confronting a perilous jump, one it can neither hide from nor avoid, no matter what. There’s a potential crisis in China’s model of economic growth.”

Wu Jinglian, a prominent economist writing in Caijing, a business magazine, said: “China’s economic and social contradictions seem to be nearing a threshold.”

Xi knows all this. Senior people all around him are urging him to set out reforms, Chinese and Western media are reporting. In fact, Xi just sent a team of officials to Singapore. They’re looking at that city-state as a possible model. Singapore is a deeply authoritarian but prosperous state that does allow free elections for subordinate positions. Still, many social liberties like freedom of the press and assembly are limited.

Most China analysts agree that the country’s financial problems should be the government’s most significant concern. After all, for decades the Chinese have lived with a well-known but unspoken pact: The people will accept authoritarian leadership as long as the government makes it possible for them to grow ever more prosperous. Beijing obviously isn’t keeping its part of the bargain.

In fact, right now the mega-wealthy, including many government officials, are still doing quite well. Yacht and big-diamond sales are soaring, but sales of less expensive luxury goods are not. The Burberry coat and Hennessy cognac companies have issued profit warnings because of plummeting sales in China.

The question is, even if he wants to reform, can Xi pull it off? So many government officials are growing exceedingly wealthy under the current system, won’t they resist significant change? After all, the Chinese legislature’s 70 richest members accrued more wealth last year than the combined net worth of all 535 members of the U.S. Congress, the president and his Cabinet.

All of this is a monstrous, looming problem for China’s new leader. So how worried should Washington really be?

By Joel Brinkley

Joel Brinkley, a professor of journalism at Stanford University, is a Pulitzer Prize-winning former foreign correspondent for the New York Times. ― Ed.

(Tribune Media Services)