Ground Floor: When it comes to reading the future for China's surging economy, an economic forecaster's plight is similar to that of a pagan priest in ancient Rome, picking through goat's entrails to tell what the gods have in store.

Commentators predicting whether the world's fastest-growing major economy is heading for a hard or a soft landing have to rely on an arcane array of sentiment indicators, piecemeal, obscure data and talismanic signs to see where China is headed.

The questions they ask of the oracle are these:

Will the economy seriously overheat and come crashing down in flames?

What about all the jobs being lost by US and European manufacturers to those inexpensive workers in Guangdong province?

And with China's continued expansion and growing avarice for overseas investment, will there be any capital, or oil, left for the rest of us?

Commentators on the Chinese economy, however, can be prone to all manner of mythologising and, as with most myth-making, there are both facts and fictions at work within the web of legend.

Take, for example, foreign direct investment (FDI) to China. It is certainly large, and growing - it increased by 12 per cent to around $34 billion (€28.3 billion) in the first half of this year.

But as Niall FitzGerald, the Irish outgoing head of Unilever who will soon join media group Reuters as chairman, points out, China is not yet an FDI superstar.

"If the world has the impression that China is sucking in the lion's share of US foreign direct investment, then the fact that US companies invested two-and-a-half times more in Ireland than they did in China in 2003 should show that to be a myth," Mr FitzGerald, who is co-chairman of the Trans-Atlantic Business Dialogue, recently wrote in the International Herald Tribune.

And the fact that politicians in the United States are pushing out a message that China's cheap labour is eating up American jobs is not surprising in an election year.

These fears emerge all the time - there were similar fears about Japan in the 1980s and south-east Asia in the 1990s. The Germans were worried in the early 1990s that the Republic's low corporate tax rates and labour costs were attracting companies away from Germany.

What is true, however, is that gross domestic product (GDP) in China grew 9.8 per cent in the first quarter of this year, in line with the strong growth of recent years.

This upsurge translates into a growing number of new Buicks and Audis, whose drivers wear designer clothes as they negotiate newly built, traffic-clogged expressways.

They park their cars outside their new apartments in Beijing's emerging Central Business District, before settling down on their Ikea couches to watch pirated €1 DVDs.

China is certainly a richer place than it was a few years ago, but this wealth does not extend much further than the prosperous cities of the eastern seaboard, Beijing and southern China. Evidence of runaway growth in the countryside is difficult to detect.

Farmers account for around 800 million of China's 1.3 billion people, but they have seen very little of the new wealth enjoyed by city dwellers. Most live on less than €1 a day.

Chinese Premier Wen Jiabao has said that keeping tabs on the growing wealth gap is a priority for the government. Beijing is keen to brake economic growth to avoid a hard landing and to offset any political instability that a growing wealth gap may cause.

Measures taken by the state since last year to curb alarming surges in investment in sectors such as steel have slowed parts of the economy and have raised hopes of a soft economic landing.

However, sustained growth in factory output is causing concern among economy watchers, who fear that China's factories are humming just a little too loudly for a country trying to bring economic growth to more sustainable levels.

"External demand for China's exports remains as robust as it has been for many months now," according to Goldman Sachs analyst Hong Liang, as plants continue to churn out fridges, computers, sport utility vehicles and other goods for consumers, both domestically and internationally.

Last year, factory output rose 17 per cent, which made Chinese factories a crucial source of growth for other countries as they sucked in raw materials and components.

But the impact of this on China's stretched power supplies has added to fears that an economic boom might turn to bust amid rising inflation and rapid investment growth.

Slower output growth is needed to ease power shortage pressures currently gripping China. The government closed thousands of factories around Beijing because of a power shortage.

Any slowdown in factory output will not be sudden, because of strong demand for cheap Chinese exports.

The argument that China is overheating is losing impetus at the moment, in the wake of data showing how factory output showed more moderate growth in the year to June as government efforts to cool the economy took effect.

China appears to be in for a soft landing. But ultimately it's in the hands of the gods.