Dragons

So, if we look ahead a couple of decades, it is likely that China will be twice as large as the world's second-largest economy. At that time, it will have a private sector that is larger than the total size of the second-largest economy in the world. It is likely to have living standards and average productivity levels that are more-or-less similar to Europe and North America, or Australia. It is likely in two decades’ time that continued economic growth in China will depend on innovation at the frontiers of world productivity. So then, when China is a rich country—when most of its people are rich—it will face the same challenges for growth as today's developed countries. The rate of economic growth will then depend heavily on innovation that extends the frontiers of technology and raises multi-factor productivity growth.

China will not look exactly the same as other major economies. One cannot be sure where the political system will go. China's current political system—the strong central authority exercised through the Communist party that we associate with Leninism—is unlike that of any other developed country. The structure of the Chinese political system will not be the same in 20 years’ time as it is today, but it may not look much like other rich countries then or now. China will find its own path to greater political flexibility and greater accountability of the government to private preferences.

That is from an article by Ross Garnaut in the more recent number of the Australian Economic Review (December 2012).

More articles on the future of China are here, in the section Policy Forum, they are ungated.  

The articles are in general very optimistic about China future, see this one ("Embracing the China of Tomorrow"), for example.