If global economists are distraught over the gloomy numbers coming out of China, imagine how Xi Jinping must feel.

China's president, officially in the post for barely a month, is still consolidating his power. At home, he confronts a widening rich-poor gap and endemic pollution, not to mention bird flu and rivers overrun with dead pigs. Abroad, China's erstwhile ally North Korea is looking increasingly unhinged. Now Xi faces intense pressure to retool the Chinese economy if he wants to build on gains the Communist Party has delivered over the last 30 years.

Xi could be excused for feeling a tad bitter. He's in this awkward position largely because of the failings of his predecessor, Hu Jintao. That may sound like an odd way to characterize Hu's tenure. During his decade in office, China grew at rates of more than 10 percent, surpassed Japan to become the world's No. 2 economyand matured into a key diplomatic actor.

Hu and his premier, Wen Jiabao, should have used this time to wean the Chinese economy off its obsessive reliance on exports and investment. Yet too many well-placed figures were getting too rich. Modestly paid politicians mysteriously became multimillionaires. Local governments amassed mountains of debt for boondoggle projects. Hu and Wen presided over a robber-baron era that would have made Cornelius Vanderbilt and J.P. Morgan blush.

By contrast, Xi has been saying all the right things about revamping the economy so that domestic demand, not sweatshop labor, drives growth. He talks about the need to attack chronic graft and to preserve the environment. He has made noises about increasing spending on research and development, and has promised to institute a more inclusive urbanization strategy.

One of the most tantalizing questions in economics is whether Xi has the courage to oversee such an ambitious rewriting of China's model. Yet the real question is this: Will the vested interests getting obscenely rich in Beijing let him?

David Fuller's view China's extraordinary growth over the last three decades is unprecedented. It has also caused plenty of problems, from pollution which can and will be reduced, to corruption which is much harder to root out. Corruption is also part of the human condition, as people in every country, developed or under developed, are well aware. When corruption levels are high, it reduced a country's GDP growth potential.

China's size and growth rate understandably attracts investor interest. It has certainly tested our patience in recent years, although this is far from atypical among global stock markets, particularly during a secular valuation contraction cycle which has been much discussed in Fullermoney.

China's cyclical appeal is that valuations are certainly lower today. I have felt that the optimism regarding Xi Jinping's potential was justified since he first emerged as China's leader. He also has enough power to influence China's direction.

If you agree, and are interested in investing in China, the next question is: in which sectors? My answer, which I have mentioned before, is anything which caters to consumers. Healthcare would be near the top of my list, and not just in China.

Given China's size, Communist history and economic growth in recent decades, there is inevitably a degree of fear and antagonism towards the country. I have commented on this from time to time, and it was also evident in some of the emails following Bloomberg's article above. Therefore I was interested and also pleased to see this impassioned response from Jay Dratler, posted among the emails:

"While this piece accurately summarizes China's challenges, it epitomizes all that's wrong with our nation's global outlook. Why in the world should we predict---even hope---that Xi and China will fail?

"This newspaper is supposed to be a *business* newspaper. If A is in business with B, does A hope and predict that B will fail? Not hardly.

" For better or for worse, China is our biggest business partner. We have some disagreements (who in business doesn't?), but it's a worthy partner. It has not sought global empire since the early Middle Ages. Instead, it has tried to expand its influence through business and trade alone. Its millennial experience in doing so is responsible for its meteoric rise from a least-developed nation to part of the first world, and (probably soon) to the world's leading economy.

" If China fails, we fail. If China succeeds, we will succeed, or at least our economy will grow faster. If we insist on retarding China's peaceful rise just to preserve our "American century," we will only shoot ourselves in the foot.

" Xi Jinping is the most promising leader of China since Deng Xiaoping. He says all the right things, including "First, China does not export revolution; second, it does not export famine and poverty; and third, it does not mess around with you." Shortly after he consolidated his power, the provocations and demonstrations against Japan over the Diaoyu/Senkaku Islands ceased as if someone had turned off a switch. He appears ready to work with us to cure the pathology of North Korea.

" We need to work with this guy, not jeer at him.

" The global economy is not a football game or a zero-sum exercise. We ought to want Xi and China to succeed, not fail, and vice versa. And we ought to be smart enough to understand that a successful China will democratize far faster than a failing one. Can we at least simulate being rational adults?"