e renminbi against the US dollar since
the end of the dollar peg reached 15% in January 2008. The
restructuring of the economy and resulting efficiency gains have
contributed to a more than tenfold increase in GDP since 1978.
Measured on a purchasing power parity (PPP) basis, China in 2007
stood as the second-largest economy in the world after the US,
although in per capita terms the country is still lower
middle-income. Annual inflows of foreign direct investment in 2007
rose to $75 billion. By the end of 2007, more than 5,000 domestic
Chinese enterprises had established direct investments in 172
countries and regions around the world. The Chinese government faces
several economic development challenges: (a) to sustain adequate job
growth for tens of millions of workers laid off from state-owned
enterprises, migrants, and new entrants to the work force; (b) to
reduce corruption and other economic crimes; and (c) to contain
environmental damage and social strife related to the economy's
rapid transformation. Economic development has been more rapid in
coastal provinces than in the interior, and approximately 200
million rural laborers have relocated to urban areas to find work.
One demographic consequence of the "one child" policy is that China
is now one of the most rapidly aging countries in the world.
Deterioration in the environment - notably air pollution, soil
erosion, and the steady fall of the water table, especially in the
north - is another long-term problem. China continues to lose arable
land because of erosion and economic development. In 2007 China
intensified government efforts to improve environmental conditions,
tying the evaluation of local officials to environmental targets,
publishing a national climate change policy, and establishing a high
level leading group on climate change, headed by Premier WEN Jiabao.
The Chinese government seeks to add energy production capacity from
sources other than coal and oil as its double-digit economic growth
increases demand. Chinese energy officials in 2007 agreed to
purchase five third generation nuclear reactors from Western
companies. More power generating capacity came on line in 2006 as
large scale investments - including the Three Gorges Dam across the
Yangtze River - were completed.

Christmas Island
Phosphate mining had been the only significant
economic activity, but in December 19