Many foreigners to China would be unable to say how this big country with the world's largest population has managed spectacular economic development for decades. What has led China, languishing in poverty for decades, to become the world's second largest economy with world-class infrastructure and an economic resilience that even the United States and the European Union envy?

If foreigners carefully read the speech delivered by the General Secretary of the Communist Party of China Hu Jintao at the opening ceremony of the 18th National Congress of the CPC on Nov 8, they may get the answer. "Socialism with Chinese characteristics" and its applications is the reason behind the unprecedented economic and social miracle that is China.

About 200 years after Adam Smith's "free market" theory launched colonialism and capitalism to rule the world, and more than a century after Karl Marx analyzed, appreciated, praised and then predicted the downfall of that theory, we have financial crises in the US and the EU. Only China's new development model - a socialist country with market economy - has been able to avoid such a crisis.

Despite that, Chinese leaders remain somber minded about their country's fast economic growth at the cost of cheap labor, environmental damage and over-exploitation of natural resources.

The term, "Scientific Outlook on Development", was written into the CPC Constitution during the 17th Party National Congress in 2007 and it will ensure that China's economic miracle continues in the coming decade.

What Chinese leaders realized after two decades of rapid development was that the Industrial Revolution model could not be wholly replicated in their country.

Because of their industrial process, Europe and America assumed that natural resources were free and inexhaustible. They were oblivious of the ecosystems that cleanse and maintain the planet. When resources depleted and pollution increased to alarming levels, the smoke stack industries moved, from Europe to the New World east coast to the Midwest to the west coast and finally to Asia. Don Henley of The Eagles got it right in the ambiguously titled Last Resort: "There is no new frontier, we have got to make it here".

The First Law of Thermodynamics says materials and energy cannot be produced, only transformed. The Second Law says only some parts can be transformed for the better (economic goods) but the net result is always, inviolably, an irreversible degradation of quality (environmental "bads"). This is obvious in a laboratory or a closed system like a spaceship. When economic processes were small compared to our world, it was okay to ignore or cheat and forget that we live on a materially finite planet.