A gradual slowdown in that economy will have major effects, good or bad, on markets back home. MoneyShow's Howard R. Gold, also of The Independent Agenda, explains what investors should keep their eyes on.

When President Obama meets new Chinese president Xi Jinping in California on Friday, it will be a big contrast from his first official meeting with the previous leader, Hu Jintao, back in April 2009.

Then, China was still basking in the afterglow of the 2008 Beijing Olympics, when its spectacular opening ceremonies and its pace-setting 51 gold medals declared that China had arrived on the world stage.

China responded to the financial crisis with a massive stimulus package that focused heavily on infrastructure and construction. That kept its GDP growing in the high single digits while the developed world was heading south. When the global economy began recovering, China's real GDP growth topped 10% in 2010.

But last year, China's GDP growth was 7.8%, the weakest since 1999, and it will probably match that this year. The Conference Board projects China's GDP growth will average 5.8% from 2013 to 2018, and a mere 3.7% from 2019 to 2025.

That may seem pretty good compared with the developed world (US GDP growth may chug along at 2% or so), but China's GDP has grown by about 10% on average since Deng Xiaoping unleashed capitalism three decades ago. And Chinese leaders have viewed 8% growth as a bare minimum to stave off social unrest.

Nonetheless, China's new leadership has declared the days of rapid economic growth over, and Xi plans to carry out the long-anticipated "rebalancing" from an export-driven machine to a more consumer-oriented economy, and to deal with China's looming environmental nightmare. So, the next few years probably will be pretty rocky.

But China's bumpy transition is likely to be good news for many US companies and US-focused investors. Companies that use raw materials should do well, because their costs will go down, giving earnings a nice boost. That's why, as I've written here for years, solid blue-chip US stocks should continue to outpace once-invincible emerging markets, especially China.

But commodities producers, resource-intensive economies, and commodity currencies will be hurt. Hyperinflationists, gold bugs, and commodities supercycle true believers will share China's pain.

This would be a huge reversal from the 2000s, when China's rapid growth, along with the mid-decade housing construction boom in the US, bid up commodities prices. The Thomson Reuters/Jefferies CRB index soared more than 270% from its July 1999 low to its recent April 2011 peak. It has dropped about 23% since then, in bear market territory.

Copper prices sit at three-year lows. Aluminum, tin, iron ore, nickel, and zinc have plunged from their 2007 bubble peaks. Coal and crude oil also are lower. Only some agricultural commodities have held up.

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Tickers Mentioned: Tickers: F, GM, DAL, LUV