in 2000. Growth fell back to 3.1% in 2001 and 2.1%
in 2002, largely due to lackluster global growth and the devaluation
of the Argentine peso. Chile's economy began a slow recovery in
2003, growing 3.2% and accelerated to 5.8% in 2004. GDP growth
benefited from high copper prices, solid export earnings
(particularly forestry, fishing, and mining), and stepped-up foreign
direct investment. Unemployment, however, remains stubbornly high.
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.

China
In late 1978 the Chinese leadership began moving the economy
from a sluggish, inefficient, Soviet-style centrally planned economy
to a more market-oriented system. Whereas the system operates within
a political framework of strict Communist control, the economic
influence of non-state organizations and individual citizens has
been steadily increasing. The authorities switched to a system of
household and village responsibility in agriculture in place of the
old collectivization, increased the authority of local officials and
plant managers in industry, permitted a wide variety of small-scale
enterprises in services and light manufacturing, and opened the
economy to increased foreign trade and investment. The result has
been a quadrupling of GDP since 1978. Measured on a purchasing power
parity (PPP) basis, China in 2004 stood as the second-largest
economy in the world after the US, although in per capita terms the
country is still poor. Agriculture and industry have posted major
gains especially in coastal areas near Hong Kong and opposite Taiwan
and in Shanghai, where foreign investment has helped spur output of
both domestic and export goods. The leadership, however, often has
experienced - as a result of its hybrid system - the worst results
of socialism (bureaucracy and lassitude) and of capitalism (growing
income disparities and rising unemployment). China thus has
periodically backtracked, retightening central controls at
intervals. The government has struggled to (a) sustain adequate jobs
growth for tens of millions of workers laid off from state-owned
enterprises, migrants, and new entrants to the work force; (b)
reduce corruption and other economic crimes; and (c) keep afloat the
large state-owned enterprises, many of which had been shielded fr