If China were driving, they would put on the left signal, but turn right. No, that’s not just some unnecessary jab at our Eastern rival using a racial stereotype. It actually pertains to Chinese economic policy.

Last week, Chinese officials visited President Barack Obama, Treasury Secretary Timothy Geithner and others in Washington D.C. to discuss how the two large countries should work together to lead the world out of the current recession – not in the slow, methodical way one would ride a bicycle up a hill, but like Evil Knieval jumping a motorcycle over a row of eighteen-wheelers – in a blaze of firework-laden glory.

To understand how the two will do so, however, it is key that we understand how the economy of China works in comparison to the United States, despite its seemingly opposite approach to growth and development. Below, we dispel some myths about the Far East nation’s economic acuity.

Myth #1: China – like the rest of the world – is struggling greatly from the current recession.

Not so much. The Chinese economy is a different beast. It doesn’t rely heavily on oil or its financial sector to spread wealth to the rest of the nation. At 7.8 trillion dollars, China’s economy is only second to the United States, which makes their sustained growth even more impressive.

According to the C.I.A. World Fact Book, China experienced GDP growth of around 9.8 percent in 2008 – far above the world average of 3.8 percent – which ranked eighth behind five oil-rich countries, Anguilla – whose GDP ($108.9 million) is only three million more than the combined salaries of baseball’s five highest-paid players – and a special administrative region of itself (Macau).

China did not get taken down after the mortgage crisis led to the stock market crash because complicated derivatives were abstained from in preference for more local investment. Their economy was insulated, so in the fourth quarter of 2008, China sat pretty, and frowned only when it realized that a poor Western economy meant less demand for goods it produces.

Myth #2: China is a communist country.

While China is not the “peoples’ republic” that it claims to be, it is unfair to label the country as communist. Not too far in the past, the Chinese Communist Party implemented perhaps the worst economic policies in the history of the modern world, resulting in nearly twice as many deaths due to starvation than the Holocaust killed in total. Nearly everything Chairman Mao Zedong did in the name of Karl Marx’s ideal of “full communism” failed miserably.

In 1978, Deng Xiaoping became chairman of the Communist Party. By this time, it was apparent that market-oriented economic policies that were instated in Asia’s “Four Tigers” (South Korea, Taiwan, Hong Kong, and Singapore) were resulting in greater prosperity than shut-in China.

Big changes started in agriculture, where producers were given a choice on what to grow, the government accepted rent for the land in the form of a quota, and a small amount of profitability was open to farmers. In industry, reform experiments were initially performed with state-owned enterprises (because that’s all that existed at the time), but later gave way to a newly-forming private sector. Successful reform measures taken included allowing individual state-owned companies to decide what to do with some profits (as opposed to simply handing it all over to the government to distribute as it saw fit), further specialization in production processes, pay differences for different levels of work, and increased freedom in global trade (sometimes using tax breaks, which are not standard for a communist or socialist nation). These measures helped create competition and innovation between firms, without completely departing from a centralized economic system.