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China’s Emergence as a Global Economic Power
China’s Economic RiseThe new policy of opening and market-oriented reform adopted in 1978 trans-
formed China over the next three decades into a leading world economic
power. China transformed itself from an economically decrepit and impover-
ished albeit equalitarian country almost entirely outside international flows
of merchandise, capital, and technology, into a leading global actor in each
of those areas. In terms of overall size and rate of growth, volume of exports
and role in international trade, global capital flows, and the acquisition and
development of technology for industrial production, China has become a
world leader, if not yet the world leader.
The growth and transformation of China’s economy had a deep impact
on China’s foreign policies. As China emerged as the world’s leading low-
cost manufacturing center, its demand for fuels and raw materials of all sorts
skyrocketed. Chinese firms increasingly went abroad, typically with govern-
ment support, to secure needed raw materials wherever they might be found.
Experience and economies of scale gained by Chinese firms in constructing
in the 1980s and 1990s the solid infrastructure that underpinned China’s
development made highly competitive offers by those Chinese firms to con-
struct similar infrastructure in other countries: harbors and cargo handling
facilities, railways, highways and urban subways, high-rise buildings, tele-
communications systems. China became a major supplier of engineering
services for infrastructure around the world, involving its firms in sectors
sometimes sensitive for other country’s national security concerns. While
some countries welcomed this investment, others banned Chinese invest-
ment in sensitive sectors and looked with suspicion on Chinese investment in
sensitive projects in other countries.
Chinese consumer and capital goods became increasingly competitive with
those of earlier Western industrializers. Chinese high-speed railway technol-
ogy began to compete with that of Japan, for example. Oil-rich countries,