The question is whether the rest of the world feels a gentle ripple or tidal wave.

Now China is more than just a cog in the global economy.

No one should underestimate its ability to affect us all.

But how?

At 18 percent of the world economy, China is the second largest importer on Earth.

Neighbors such as Japan, South Korea are deeply dependent on its success.

Germany is at risk as it produces capital goods, and commodity specialists such as Australia rely on coal, iron, or exports.

Pain here will hurt, but it's rarely decisive.

And although China's currency has gone down six percent against the US dollar, this is no currency war.

The renminbi has modestly risen against most of its main trading partners.

China worries of help *drag bring crude down to a fresh eleven-year low below 33 dollars a barrel.

Pity Russia, Brazil, the gulf states have supplies to the all commodity sectors.

But low commodity prices mostly redistribute income rather than *dynamite economic prospects. Producers lose, consumers gain.

The IMF still thinks that the net effect of lower commodity prices is positive for the global economy.

A China slow down weakens inflation repression around the world.

At worst, a deflation respire will cut incomes and make debts unpayable. That's worrying.

But low inflation also gives policy makers additional ways to keep monetary policy looser for longer, so there is a silver lining.

The Panacea effect of confidence has the greatest potential to shock.

If China's troubles persuade companies to ditch investment and households to tighten their belts, the global economic outlook can change radically for the worse.

2008 told everyone that once confidence has gone, companies, banks, markets, and the financial system are all vulnerable.

So, gentle ripple or tidal wave, that depends most on whether the rest of us panic.