Is China on the down?

The topics most discussed about these days among business circles are, American recession, shift in economic power to China and India. Many have predicted that China would be 1.3 times of American economy by 2050 (though this alone shouldn't make it economically stronger than USA!) but the country truly seems to be on the down in terms of economic progress. Chinese government has stopped supporting their industries and left them on their own as many of the capilistic countries do, and the worst policy that is going to effect Chinese industries are that government has decided to allow their currency to apreciate and are not controling it. This is making their products more expensive and already industries started moving out of China. China's real challenge lies in sustaining their economy after the olympics when the demand for all the goods would come down drastically.