China’s ongoing economic growth, while globally beneficial in many ways, has always had a dark side. State-mandated currency imbalances, blatant copyright and patent infringement, a complete disregard for the environment, the possibility that one of these days those millions of low-paid workers laboring in sweatshop conditions are going to say “enough is enough”: The Chinese “miracle” has long created the unsettling feeling things can’t keep going on like this forever.

China’s ongoing economic growth, while globally beneficial in many ways, has always had a dark side.

State-mandated currency imbalances, blatant copyright and patent infringement, a complete disregard for the environment, the possibility that one of these days those millions of low-paid workers laboring in sweatshop conditions are going to say “enough is enough”: The Chinese “miracle” has long created the unsettling feeling things can’t keep going on like this forever.

Now comes news that the Chinese government is preparing to pass legislation formally limiting foreign acquisitions at the same time the Chinese government itself is preparing to go on a global buying spree. Basically, as explained in the International Herald Tribune, China’s coffers are now full to bursting, so it no longer needs foreign cash to keeps its economy moving forward. More than ever, the Chinese government will be able to pick and choose which companies are allowed to invest their money and which are not-based on issues like “national security.”

Of course, national security is one of those things that can mean different things to different people, especially politicians: Not to mention the fact that China’s considering such a step at this time is the height of hypocrisy. China’s Chery Automobile Co. is talking about setting up plants in more than a dozen countries around the world by 2010. At the same time, an unnamed Chinese firm is said to be eyeing disc manufacturer Seagate Technology. In the aerospace industry, Chinese companies are earning millions providing composite components for Boeing’s recently unveiled Dreamliner.

For years now, the attitude among many U.S. multinationals and the government has been that it is in the best interests of the United States to move slowly (or even look the other way) regarding Chinese trade issues. But this pending legislation should serve as a warning that those days have passed. There’s nothing wrong with China becoming a global economic powerhouse-just the opposite. However, employing formally legislated protectionism to help accomplish this goal is wrong, and the U.S. government and business leaders need to do something about it. Allowing China to set up barriers to its markets, labor pool and infrastructure is no way for the United States to promote either its own interest, the interests of its allies or the U.S. manufacturing community-even if it means that in the short term a few deals may go sour in the ensuing fracas. Ultimately, whenever governments get involved in economic activity the way the Chinese government wants to get involved now, the result is inequality, political instability, conflict and anything but free and trade.