The scary thing about China is that it has a huge asset bubble, and when those pop you can have long-term pain. For instance that is what happened with Japan in the 80s. (Or us in 2008, though our relative bubble was smaller.)

The doubly scary thing is that this could come at a point where we have so much that is so fragile in the global economy. Obviously we have the slow-moving European debt crisis. We have the Chinese bubble. We have a plethora of distressed debtors in the USA combined with a slowing economy. If all the dominos remain standing, we're fine. If they start to fall, how many will fall?

See http://articles.businessinsider.com/2012-04-26/markets/31402... and http://www.forbes.com/sites/panosmourdoukoutas/2011/11/30/wh... for a couple of random takes comparing China today to Japan.