The present climate of tremendous economic growth in China can be understood in light of a great many factors, both internal and external to the Chinese economy and to the involvement of the Chinese government. China has been one of the most advanced societies and civilizations in the history of mankind, since well before Europe rose to prominence. The Chinese had made many crucial technological and scientific advances that contributed to the well-being of humanity, such as the compass and paper, and also gunpowder, whose offensive use revolutionized the way wars are fought everywhere around the world.

Surely, one of the greatest things the Chinese Communist government could do for the Chinese economy and business climate to move it in the right direction was to free up the tremendous entrepreneurial spirit and potential of the hard-working and industrious Chinese people, and use its own resources to further new private Chinese businesses, inventors, innovators, and entrepreneurs — something that used to be anathema in the regime of Chairman Mao Zedong.

Since China’s economy and politics is a mix between free market reforms, private initiative and capitalist elements on the one hand, and a strong government industrial policy, control of investments, and regulation of business in China on the other, businesses in China are in somewhat different positions than their Western capitalist counterparts: they benefit from the state protectionist measures of the central government and are often the beneficiaries of what is known as “corporate welfare” (i.e. they receive subsidies and support from the Chinese government.) But regardless of the idiosyncrasies of the Chinese economic model of so-called “socialism with Chinese aspects,” it is undeniable that Chinese manufacturing, wholesale, and retail businesses have been very successful at breaking into global markets and flooding the world with various industrial and consumer goods made in China.