The one constant in China seems to be change, and in the last 20 years that change has focused on the transition to a market economy. This has allowed the country's young people to exercise their technological and entrepreneurial skills at home -- which bodes well for China's future. PNS commentator George Koo is an independent business consultant, former Chairman of Silicon Valley based Asian American Manufacturers Association, a Human Relations Commissioner of Mountain View, Ca. and a member of Committee of 100, a national organization of prominent Chinese Americans.

SHANGHAI -- The future of China, as with any nation, rests with its youth. If the young people I met on a recent business trip are in any way typical, China is on the way to becoming a great power.

The tragic Cultural Revolution of the mid 1960s and early 1970s created a lost and uneducated generation. After 1979, when China embarked on a reform program, young people emerged from a state-constructed cocoon to seek their way in a system evolving from strict command economy towards a market economy. Many of the best and brightest ended up in the West.

The latest generation seems to be putting everything together. They are confident, knowledgeable and motivated -- and do not necessarily look for opportunities elsewhere.

In Dafeng, a sleepy coastal township, Wendy, a smiling young woman, followed us with a camcorder as we inspected a plant making compressors for export. Seeing foreigners at this out-of-the-way place must be noteworthy, we thought.

Then came the business discussion and Wendy became our interpreter -- speaking nearly flawless English and handling all the terminology with aplomb. One might expect this in Shanghai over 200 miles to the south, but it was impressive in this remote, nearly rural area.

Cherry, an engineer working for an American company in Shanghai, has called her parents regularly since they emigrated to the U. S. She avoids the onerous toll charges by Internet access cards, which charge about 12 cents per minute and uses her home PC, rather than the traditional telephone.

The head of a major state-owned corporation in Beijing showed me how his son has set up a live video feed from his living room in San Francisco. On his last visit, he downloaded the necessary software into his father's desktop PC and showed him how to use the Internet. Now, the executive can dial into the Internet at any time to see if his son is at home and key a conversation in real time.

The daughter of a powerful government minister, just home from London with an MBA, rejected a cushy post with the Asian Development Bank, taking instead a position with International Finance Corporation, a private investment arm of the World Bank, because it offered greater challenges and opportunity to learn.

The most complete glimpse of where China could be heading came from a meeting with Holly and his management team. After graduating from Wuhan Automotive Polytechnic, Holly went to work for a state-owned trading company, but within a year he saw an opportunity to export certain automotive components from China. He promptly quit his job and recruited a team from among his classmates to form a private company.

Holly found a township enterprise making bicycle components that was willing to learn to make auto parts. When the town leaders suggested forming a joint venture, Holly agreed on the condition that they divide the ownership into 55% for his company, 30% for the town and remaining 15% for two "senior" persons in the late 40's and early 50's. The two "seniors" have no operating responsibilities. Their job is to interface with government officials, represent the venture when problems arise with material suppliers, and to handle other situations where executives in the 20's may not be taken seriously.

Holly is confident of success because, "The Chinese people are hard working and will follow orders, and Chinese made machinery is cheap and versatile and works well along side of plentiful labor."

Workers at his plant will not be paid by the hour but for all the good parts they produce, and must "buy" back every bad part they are responsible for. If several workers share responsibility for not meeting specifications, then the charge is also shared proportionally. If they make only good parts, the workers can be assured of an income higher than their peers can earn in the Shanghai area.

To entice Charles, his best friend and classmate, to join his company as general manager, Holly offered Charles 30% stake. Last year, Holly got a visa to go to attend a trade show but sent Charles instead, because, he said, Charles is better at interfacing with customers.

Virtually all of Holly's management team have adopted western first names and all speak English with varying proficiency. The company seems to have combined the best of local practices with western management techniques.

Amalgamating proper education with international business perspective and strong personal motivation seems to represent the new generation in China. Given the opportunity, they will lead the way in China's future.

Thanks to misinformed or misguided leaders, America devotes a great deal of energy and resources to worrying about espionage and a military threat from China. What they should be concerned about is whether America's future generation can compete economically and be equivalently well educated and motivated.