China and Japan began direct trading of their currencies in financial markets in Shanghai and Tokyo on June 1. The rapid growth of the Chinese economy and the notable rise in its influence have paved the way for this move, which was another important step toward making the yuan an international currency.

Since the 16th National Congress of the Communist Party of China was held in 2002, China has strengthened macroeconomic regulation under the guidance of the Scientific Outlook on Development--a concept that emphasizes comprehensive, balanced and sustainable development. It has deepened economic restructuring, promoted change in its economic development model and succeeded in coping with challenges including the impact of the global financial crisis. As the Chinese economy maintains stable and rapid growth, its status in the global economy has continued to rise.

Data from the National Bureau of Statistics show China's economy grew 10.7 percent annually on average from 2003 to 2011, as opposed to 3.9 percent for the world's economic growth. China's share in the world economy climbed from 4.4 percent in 2002 to around 10 percent in 2011. China went from being the world's sixth biggest economy in 2002 to the second biggest in 2010 and remained in that place in 2011.

The fast-growing Chinese economy has become an engine of the world economic system, said Peter Loescher, President and CEO of German conglomerate Siemens AG. As it accelerates change in its economic development model by attaching greater importance to industrial upgrading and "green growth," China will present more opportunities to multinational companies including Siemens, he added. Loescher, who studied in Hong Kong in the 1980s, expressed amazement at the remarkable changes in China's economy.

Siemens not only views China as its manufacturing base but has also established 16 research and development centers in the country. Likewise, Germany welcomes Chinese investors, said Loescher, who is also chairman of the Asia-Pacific Committee of German Business.

"Over the past 10 years, the growth of the Chinese economy has laid a solid groundwork far beyond expectations for national revitalization," said Cai Zhizhou, a research fellow with the National Accounts and Economic Growth Research Center of Peking University. "Moreover, the growth has been relatively stable, unlike in the previous economic cycle." In 2007, China realized the goal of doubling its 2000 GDP by 2010 ahead of schedule.

Ten years ago, the Chinese economy began to enjoy the benefits brought about by China's entry into the World Trade Organization (WTO) after it overcame the devastation of the Asian financial crisis and established the initial framework of a socialist market economy.

Lin Jingliang, Manager of the Design Consulting Department of the Shunkang Garment Co. Ltd., reflected on the past development of his company. A decade ago, Shunkang was a typical labor-intensive company processing raw materials supplied by foreign firms. The company, whose annual sales revenue was just over $1 million, underwent explosive growth thanks to huge foreign demand unleashed by China's WTO accession. In recent years, however, foreign orders have plummeted in the wake of the global financial crisis. Faced with the predicament, Shunkang transformed itself from an exporter to a producer for domestic consumers. As a result, its annual sales revenue soared to nearly $10 million.

"China's WTO accession has presented great opportunities," said Zhuang Jian, a senior economist with the China office of the Asian Development Bank. "At the same time, the country has experienced many external shocks in its economic development. But China is more experienced, forward-looking and flexible in macroeconomic regulation. By addressing risks of both inflation and deflation with macroeconomic policy tools, it has smoothed drastic economic fluctuations."

The Chinese economy entered a new round of growth after emerging from the Asian financial crisis in 2003. The economic locomotive continued to speed up until the first half of 2008. The Chinese Government took a series of measures such as reining in imprudent investment, curbing the expansion of development zones, raising reserve requirements and increasing interest rates to prevent economic overheating.

From the second half of 2008 to 2010, China implemented a package plan to expand domestic demand and ensure economic growth to cope with the global financial crisis. As it restored two-digit growth, it became the first country in the world to realize a V-shaped recovery.

China's macroeconomic policy returned to normal in 2011, when it gave top priority to stabilizing prices. In 2012, maintaining stability in the pursuit of progress became the main theme. China lowered the economic growth target--from 8 percent to 7.5 percent--for the first time in eight years to focus on hastening change in its economic development model.

Over the past decade, the rapidly growing Chinese economy has caught the world's attention, said Steven Sabey, a senior policy adviser at the China office of the UN Development Program. During its rise, China has contributed to global poverty reduction efforts by drastically bringing down the number of poor people and fulfilling the poverty reduction target of the UN Millennium Development Goals ahead of schedule.

China has laid greater emphasis on improving people's livelihoods while pursuing economic development. Liu Shijin, Vice President of the Development Research Center of the State Council, said as it applies the Scientific Outlook on Development and focuses economic progress on raising people's living standards, the Chinese Government has put more efforts into developing healthcare, social insurance and affordable housing, leading to improvements in public services.

China has also laid greater emphasis on energy conservation and the reduction of pollutant emissions. In the eyes of Xu Yongke, Director of the Metrological Bureau of Guangdong Province, the achievements of Guangdong, whose GDP ranks first among all Chinese provinces, can be demonstrated from a different perspective: while its GDP skyrocketed from 3 trillion yuan ($473.1 billion) in 2007 to 5 trillion yuan ($785.5 billion) in 2011, the number of hazy days fell from 149 days to 75 days a year.

While China's rapid economic growth continues, domestic problems such as mounting pressure on resources and the environment, rising prices of capital goods, a widening wealth gap and underdeveloped social services remain prominent. China has a long way to go to escape the "middle income trap." Despite its rising status in the world economy, China is still a developing country, whose per-capita GDP ranks around 90th worldwide.

"Problems and gaps will provide space and motivation for China's future economic development," Cai said. "China must change its economic development model as quickly as possible, enhance its core competitiveness, reduce pollution and resource consumption and enable the people to share the benefits of development. We should make unremitting efforts to realize the national revitalization goals of building a well-off society in an all-around way by 2020 to make China a moderately developed country by the mid-21st century."