Sixty years ago when New China was just founded, Dean Gooderham Acheson, then U.S. Secretary of State, asserted that the Communist government would be unable to feed its 546 million population just like its predecessors.

Sixty years on, the 1.3 billion Chinese are not only able to feed themselves, but are expected to lead the world out of the worst economic recession in seven decades.

Starting from scratch, the Chinese economy has managed an 8.1 percent annual growth in the past 57 years. As western economies are still struggling in the current financial crisis, China achieved a 7.1-percent-growth in the first half of 2009.

Since it adopted the policy of reform and opening up, China has transformed itself within three decades from a semi-secluded country with a highly centralized and planned economy into an open and market-oriented one.

It's only a matter of time when China will replace Japan as the world's second largest economy or even challenge the United States, predicted some foreign analysts.

FOOD SECURITY AND POVERTY REDUCTION

Hou Bingxin, a farmer in west China's Shaanxi Province, still remembered the bitter days of having nothing to eat in the 1950s. "We have to squeeze some wild leaves for food when we could no longer put up with hunger," said the 82-year-old.

Hou's bitterness was shared by many who survived famine and malnutrition in the early years of New China.

In 1949, China's grain output was only 113 million tonnes. Feeding the 540 million Chinese was then top priority for the young government.

Food-rationing coupons had been issued to balance demand and supply in those days when "rice was as precious as gold".

It was not until late 1970s when the household responsibility system, modeled on a pilot program in east China's Xiaogang Village, was introduced across the country.

The new system, which allowed farmers to sell their surplus produce in markets after fulfilling their due quotas to the commune, was an instant success that quickly lifted people out of poverty.

China's grain output therefore grew by 8 percent annually between 1982 and 1991, making the country the biggest grain producer in the world.

To date, China has enjoyed six consecutive good harvests thanks to new policies including the abolition of the 2,000-year-old agricultural tax in 2006, feeding 21 percent of the world's population on less than 10 percent of the world's arable land.

Now food is no longer a problem for Hou Bingxin. Varied poultry meat is his regular dish, while wild plants are processed and packaged as healthy food supplements.

As food is largely secured for the 1.3 billion Chinese, thousands of millions of Chinese were also rid of poverty.

By last year, people with an annual per capita income of no more than 785 yuan (114.6 U.S. dollars) had been reduced from 250 million to 14.79 million, while people on low income, between 786 yuan and 1,067 yuan a year, was down to 28.41 million.

A World Bank report in 2008 attributed two-thirds of the global poverty reduction efforts in the past 25 years to China.

In the meantime, China's per capital income has increased 77 folds to exceed 3,000 U.S. dollars a year, ranking alongside middle-income countries.

FOREIGN TRADE

Li Huan, manager of Hong Kong Yuen Tai Trading Co., Ltd, is a big fan of Canton fair (China Import and Export Fair), China's only international trade fair for many years since 1949.

He still remembered his first trip to the fair in 1957 when there was almost nothing to trade. "Only textile products and some local specialty were on display. In total there were no more than 10,000 items," he said.

At that time, China's trading partners were mostly former Soviet Union and other eastern European countries. When China's relationship with the Soviet Union deteriorated by the end of the 1950s, it became isolated in international trade.

The reform and opening up policies masterminded by late Chinese leader Deng Xiaoping in 1978 have paved the way for China's shift from a planned economy to market economy.

It also ushered in the first special economic zones along China's coastal regions. With the blessing of most favorable policy incentives such as tax break and cheap land, these areas became the "powerhouse" of Chinese economy with their export-oriented businesses.

In 1950, China's export totaled a meager 550 million U.S. dollars, of which 80 percent went to Socialist countries. Six decades later, the figure increased some 2,600 folds to 1.43 trillion dollars in 2008. Products with "Made in China" tags are everywhere.

According to the World Trade Organization, by the end of June this year, China had replaced Germany as the world's largest exporter. And its foreign reserves topped 2.13 trillion dollars, far exceeding the next largest holder, Japan.

During 1953-1957, when the cash-strapped China embarked on an intensive program of industrial growth in its first five-year plan, it had to borrow 1.9 billion dollars from the Soviet Union to construct steel mills, coalmines and power plants.

Now with improved infrastructure and legal environment, China has become the world's second largest destination for foreign direct investment (FDI), drawing over 850 billion U.S. dollars from overseas companies since 1978.