From the Summary: "Since the initiation of economic reforms in 1979, China has become one of the world's fastest-growing economies. From 1979 to 2005 China's real GDP [gross domestic product] grew at an average annual rate of 9.7%; it grew by 10.7% in 2006. Many economists speculate that China could become the world's largest exporter within the next few years and the largest economy within a few decades, provided that the government is able to continue and deepen economic reforms, particularly in regard to its inefficient state-owned enterprises (SOEs), the state banking system, and fixed exchange rate system. In addition, China faces several other difficult challenges, such as pollution and growing income inequality, that threaten social stability. […] In addition, China's rising demand for energy and raw materials has raised prices for such commodities and has sharply increased pollution levels, which may have important global implications. An indicator of China's growing global economic importance was seen on February 27, 2007, when a 8.8% drop in China's main stock index contributed to a sharp decline in several foreign exchanges indexes, including in the United States (due to concerns over a possible Chinese economic slowdown). This report provides an overview and history of China's economic development, challenges China faces to maintain growth, and the implications of China's rise as a major economic power for the United States. This report will be updated as events warrant."
CRS Report for Congress, RL33534