Since the OECD’s first Economic Survey of China in 2005, China’s economy has continued to expand rapidly, driven to a large extent by the development of the private sector. Exports were hit hard by the global crisis and activity slowed down sharply over the course of 2008. However, prompt and vigorous policy actions, as well as swift adjustment in the labour market, helped growth pick up by the second quarter of 2009, putting China in the lead of the global recovery. Going forward, China’s importance in the world economy is set to increase further, as are living standards within the country. In fact, China already has the world’s second-largest economy in purchasing power parity terms, and is expected to shortly achieve the same rank at market exchange rates. It already has the world’s secondlargest manufacturing sector and is the world’s largest exporter of goods. Growth will likely continue to be driven largely by investment and a trend shift out of low-productivity agriculture, as the urbanisation rate, which is approaching 50%, continues to rise. While the size of the labour force is not projected to increase much, education levels have soared since the early 1980s, which will support future productivity growth.