China had little effect on the world economy before the latter part of the 1980s. It took nearly a decade for economic reforms of the late 1970s to have an impact. Growth was generated in investments, consumerism and the living standards of many citizens.

Although 10.8% of the citizens live on a dollar a day, the poverty level has decreased radically. It was 53% in 1980 and was down to 2.5% in 2005. The standard determining poverty seems to be measured differently in China, however. Even with exchange rates taken into account, $1 per day sounds meager.

China has grown into a world power and is a fine example for developing countries to follow. China's immense geographic area, populated by a large population makes it influential. It has an impact on the economy of the entire world.

Adapting the ways that caused China to advance to their own smaller scale would be required. The key to growth appears to be capital investment. If profit incentives are offered to all businesses in urban and rural areas it would be beneficial. Private businesses must be included.

Making the exchange rate for the yuan stronger would be an improvement. It would work to lower imported goods prices and lower the consumption of imports. Service growth would be more advantageous than industrial and investment growth.

The full potential of production and exporting of goods has almost been reached. In spite of a depressed worldwide economy, China economy is growing at a fast pace. Prospects are even more promising that at the high point of financial crisis in the world. China's already successful economy remains as likely to continue growing as it ever was.

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