The Berlin Wall had fallen and a uni-polar world was born. The US reigned supreme.
China was insignificant and Russia was moving towards the West with Gorbachev.
Everything was going so well, how could anything possibly go wrong?
An open, globalised world tilted the playing field in China’s favour.
The US was shooting itself in the foot with this half-baked idea.
It was all about profit and Western leaders didn’t think about how China would be the main beneficiary from this arrangement.
Maximising profit is all about reducing costs.
China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world.
It did have, but now China has become more expensive and developed Eastern economies are off-shoring to places like Vietnam, Bangladesh and the Philippines.
Western companies off-shored to China where they could make higher profits.
China took full advantage of the situation and got Western companies to sign technology transfer agreements handing over decades of Western design and development knowledge to the Chinese.
China was a new, fast growing economy compared to the mature, slow growing economies of the West.
Investors would be able to achieve better returns in the new, fast growing Chinese economy and this is where the money headed.