A bullish report on China's explosively growing economy, predicting that the development of Chinese capitalism will effectively end Chinese Marxism. Overholt (manager director of Bankers Trust Company in Hong Kong) notes that ever since economic reform was introduced in 1979, China's economy has grown at a rate of 9.3 percent annually despite the country's lip service to Marxism--and that at the same time, former Soviet and Warsaw Pact countries, which renounced Marx and introduced democracy rapidly, have veered dizzyingly close to economic catastrophe. In Russia, he says, the competing demands of pressure groups have paralyzed the central government and made it impossible for the country's leaders to make the hard decisions necessary to permit economic growth. In China, though, economic reform had the support of the military, who emerged from the 1979 war with Vietnam intent on acquiring Western military technology- -and so, like other Pacific Rim autocrats but unlike Western politicians, Chinese leaders didn't link economic reform with representative democracy or progress in human rights. But contrary to what Deng Xiaoping may have intended, Overholt says, the quick increase in national wealth perforce led to gradual liberalization. The author foresees a bright future for China as its people (who constitute one fifth of the human race) begin to vie with Japan for economic supremacy in Asia--a development, Overholt argues, that ``is transforming the political structure of the entire globe.'' The author also notes the critical significance of the US-China relationship for world peace, and recommends that US leaders bring to it both understanding and pragmatism. A timely report on the growth of the world's most dynamic economy, as well as a forceful argument that, often, successful political reform can follow only in the wake of--or alongside with- -economic reform.