What are the reasons for China's great economic growth?

On the surface, it’s seems easy to get impressed with China’s explosive economic growth. Everyone knows the Communist Party runs everything but they have merged their politics with Capitalism and the result is something Russia might envy.

Is China’s progress, if it continues to advance still using the system it has right now, be detrimental to America’s economic recovery and future? Americans buy stuff cheap made by cheaply paid Chinese workers. The Communist Party then leverages their huge cash surplus buying our bonds with money earned through exports in the US. What is wrong with this picture?

Is China’s boom America’s bust? If yes, what can be realistically done to level the playing field, sort of? : )