en it the
strongest sovereign bond rating in South America. Between 2000 and
2007 growth ranged between 2%-6%. Throughout these years Chile
maintained a low rate of inflation with GDP growth coming from high
copper prices, solid export earnings (particularly forestry,
fishing, and mining), and growing domestic consumption. President
BACHELET in 2006 established an Economic and Social Stabilization
Fund to hold excess copper revenues so that social spending can be
maintained during periods of copper shortfalls. This fund probably
surpassed $20 billion at the end of 2007. Chile continues to attract
foreign direct investment, but most foreign investment goes into
gas, water, electricity and mining. Unemployment has exhibited a
downward trend over the past two years, dropping to 7.8% and 7.0% at
the end of 2006 and 2007, respectively. Chile deepened its
longstanding commitment to trade liberalization with the signing of
a free trade agreement with the US, which took effect on 1 January
2004. Chile claims to have more bilateral or regional trade
agreements than any other country. It has 57 such agreements (not
all of them full free trade agreements), including with the European
Union, Mercosur, China, India, South Korea, and Mexico.

China
China's economy during the last quarter century has changed
from a centrally planned system that was largely closed to
international trade to a more market-oriented economy that has a
rapidly growing private sector and is a major player in the global
economy. Reforms started in the late 1970s with the phasing out of
collectivized agriculture, and expanded to include the gradual
liberalization of prices, fiscal decentralization, increased
autonomy for state enterprises, the foundation of a diversified
banking system, the development of stock markets, the rapid growth
of the non-state sector, and the opening to foreign trade and
investment. China has generally implemented reforms in a gradualist
or piecemeal fashion, including the sale of minority shares in four
of China's largest state banks to foreign investors and refinements
in foreign exchange and bond markets in 2005. After keeping its
currency tightly linked to the US dollar for years, China in July
2005 revalued its currency by 2.1% against the US dollar and moved
to an exchange rate system that references a basket of currencies.
Cumulative appreciation of th