Although Chinese Communist leaders have believed that China was the middle kingdom around which all else revolved, in fact, the United States has been instrumental in shaping the destiny of the People's Republic since the beginning. These benchmarks, all derivative of larger strategy toward the Soviet Union, included: Franklin Delano Roosevelt's decision to include the Republic of China as a member of the Big Four during World War II, President Harry S. Truman's decision to cut off aid to the Kuomintang during the civil war, President Richard M. Nixon's decision to effect a rapprochement with Chairman Mao's China in 1971, President Jimmy Carter's decision to normalize formal diplomatic relations in 1979, and President Ronald Reagan's decision to agree to a quid pro quo over Taiwan in 1982.
All that changed in 1991. When the Soviet Union imploded there was no longer any reason for policy toward China to be derivative of strategy toward the Russians. Now, the United States was faced with the problem of how to stabilize the vast region formerly under Soviet control. The U.S. decision was to put China in the position formerly held by the Soviet Union in Washington's strategy. Thus, under President George H.W. Bush, the United States offered to assist Beijing in a rapid modernization of China, which was still struggling to emerge from the decades of chaos and instability arising from the Sino-Soviet split and the Great Proletarian Cultural Revolution. The Chinese accepted.
The essential quid pro quo sought by the United States was that in return for China's agreement to be a strategic partner committed to the peaceful resolution of disputes, especially with regard to Taiwan, the United States was prepared to assist in a rapid modernization which would bring China out of the nineteenth century and into the twenty-first. It was Deng Xiaoping who brought together the essential decisions from within the Chinese leadership to establish the political, legal, economic, and social framework to absorb and utilize the enormous flow of wealth and technology needed to transform China into a great power.
Contrary to Chinese claims that their modernization strategy began with the late 1978 decision on "reform and opening up," and was carried out on the basis of their own efforts, reality was quite different. The history of foreign direct investment into China tells the story. Global FDI flows into China between 1978 and 1982 were negligible, totaling less...