Arguably, one of the greatest drivers of economic growth and prosperity in the Chinese economy has been the expansion and liberalization of trade since 1978-79, when the general Chinese economic reforms were initiated (and continue to this day). The modernization of China’s economy, which was already successful in the field of heavy industry during the years of traditional state socialism under Mao Zedong, was further accelerated and expanded by the processes of decentralization and the introduction of market mechanisms into the Chinese economy. The allocation of capital and consumer goods by market mechanisms, although still under strict supervision and regulation by the Chinese government, has since given China the opportunity to become one of the major players in the global economy, especially as a global center of relatively cheap and qualified labor, allowing for mass production of industrial machinery, various technical equipment, wholesale products, and consumer products for export on a massive scale. The Chinese government was accused of unfair protectionist measures that put its trade in a better position on the world market by using methods such as currency fixing — pegging the yuan rather than letting it float freely on the foreign exchange markets — to keep its export prices low and the volume of Chinese exports high, thus ensuring a tremendous trade surplus especially with the United States in its trade with China.

Regardless of the economic, moral or political arguments for or against the Chinese model, it is a fact that Chinese trade and commerce with the rest of the world already accounts for one of the biggest shares in the world economy. According to the analysts at the libertarian Cato Institute in Washington, D.C., the Chinese economy is well on the way to becoming the largest trading nation and the world’s largest economy within a couple of decades.