It was officially announced in August: China is now the world's second largest economy. In the last 10 years the nation's output has more than doubled, surpassing first Italy, then France, the United Kingdom, Germany, and now Japan. Given another two decades China may yet out-produce the United States for the number one spot.

As the nation pressed ahead in the world rankings it did so in what may be described as only a partially optimistic state. On the positive side, the official Purchasing Managers' Index indicated expansion in the economy making a surprise turn upward to reach 51.7 in August, from 51.2 in July, after four months of decline. However, auto sales continued to slip. The 1.22 million units sold in August marks the fifth straight month of decline, although China remains the world's largest car market.

Exports continue to be a central feature of China's economy. Much ado has been made about the end to the RMB's three-year de facto peg against the U.S. dollar, and on its potential to detract from the low-cost advantages of Chinese exports. In June, the RMB broke from its long-standing 6.83 per U.S. dollar value, since appreciating 0.7 percent. Contrary to expectations, exports have continued to increase, with July's export value to the United States - at $27.35 billion - actually up 35 percent over the previous year. The export values for the remainder of the year should be even greater as the seasonal spike in Chinese trade from August through November will likely outweigh any negative impact from a stronger RMB. Given the $705 billion in goods sent abroad in the first half of 2010, the question then becomes one of not if China will best its $1.4 trillion export record set in 2008, but by how much.