Rich Karlgaard‘s latest Forbes column focuses on signs of overall strength or weakness within the Chinese economy.

I’ll share an anecdote that everyone in the Valley has seen or heard. A house goes on the market for $3 million (the typical price for a 2,500-square-foot home on one-quarter acre). Within two weeks the house has sold. Later you learn that it went for 20% over the list price and that the buyer made an all-cash offer. The buyer was from China.

The market speaks. But what is it saying? I was in Singapore and Taiwan last month and discussed the fact that Chinese buyers are bidding up Silicon Valley prices. Singapore and Taiwan are also seeing this, as are Sydney, San Francisco, Seattle and Vancouver. The question is: Are rich Chinese house buyers diversifying, or are they planning an escape for themselves and their children? Is it Plan A or Plan B?

If you knew the answer, you could make a lot of money. China watchers around the world are trying to guess whether China’s stock meltdown and yuan devaluation are a correction or an earthquake. If smart Chinese have taken some stock market profits and reinvested them in American and Australian coastal real estate, then China’s 37-year growth story is poised to continue. On the other hand, if smart Chinese are planning their exits, China might be in bigger trouble than most know. …

… The opinion on China from Singapore and Taiwan falls closer to Plan A than Plan B, as described earlier. I was invited to speak at a quarterly board meeting of Temasek, Singapore’s $200 billion sovereign wealth fund. For the fiscal year Temasek’s fund–diversified in stocks, real estate and commodities–was up 19%. Smart folks. Several Temasek board members said they thought China’s summer stock swoon was a correction. The drop mirrors an earlier correction in Hong Kong stocks. China’s projected GDP growth of 7% isn’t a mirage, as Jim Chanos and other Western pundits have asserted. China’s growth is real and, if anything, is probably understated.

The key error many Americans make regarding China’s economy is in underestimating the strength of the country’s private and entrepreneurial sectors. They make up 70% of the country’s GDP–most of which is vibrant. Any weakness is in hoary old SOEs (state-owned enterprises), which include old-line banks with credit bubbles. Missed are the impact of such entrepreneurs as Xiaomi’s Lei Jun, dubbed the Steve Jobs of China, and the enduring strength of tech giants Lenovo and Huawei. Also missed is the role played by the millions of businesses that employ 12 or fewer employees. The small fry are armed: They have smartphones, connections to global markets and (for now) online banking and credit.