"Since the initiation of economic reforms in 1979, China has become one of the world's fastest growing economies. From 1979-2001, China's real GDP [Gross Domestic Product] rose at an average annual rate of 9.4%; it rose by 7.3% in 2001. Many economists speculate that China could become the world's largest economy at some point in the near future, provided that the government is able to continue and deepen economic reforms, particularly in regards to its efficient state-owned enterprises (SOEs) and state banking system. Progress in reforming these sectors in recent years has been somewhat mixed. […] Although Chinese government leaders have stated that WTO [World Trade Organization] accession will force Chinese firms to become more productive and competitive (and hence boost China's long-term economic growth), they have also expressed concern that required reforms will cause employment disruptions in several sectors, which could result in social unrest. A major challenge for the government is to develop an adequate social safety net to assist laid-off workers. China's economy has remained relatively healthy in 2002, despite economic slowdowns in other parts of the world. Foreign investment continues to pour into China, and the Chinese government has effectively used public spending to boost the economy. However, painful economic reforms will be necessary to keep the economic strong over the long run."
CRS Issue Brief for Congress, IB98014
United States. Department of State, Foreign Press Centers, Bureau of Public Affairs: http://www.fpc.state.gov/