And so, a great change happened during the 1970s and 80s in China. A new direction
was achieved. The United States recognized the People's Republic of China
and the Chinese, in turn, undertook a new way of developing their economy.
They would not go it alone. Russia had always gone it alone. The Soviet Union had been isolated
and could not, for a whole host of reasons, take advantage of the world economy, find the place in
the world economy, find a way to interact with the rest of the world economically to help China do
its number one objective, which was to stop being one of the poorest countries on Earth
and to become, at least in the words of their current leader, "moderately prosperous". Yes,
that's what Xi Jinping refers to the Chinese condition: "moderately prosperous".
And here's how they opened themselves in a way different from the Soviet Union. They wanted to
engage international trade, and to do so, being a so-called socialist country in a capitalist world,
they basically said to the rest of the world "We can offer you capitalists something you want,
but we have to get in return- something we need. Here's what we give you. We have a well-developed,
well-disciplined, well-educated labor force willing to work at wages way below what you pay
in North America, Western Europe or Japan. Come here. We will welcome you. We will give
you the space to operate your private capitalist businesses, and we will give you a labor force
that will make it very profitable for you. You will, of course, be leaving behind the higher
wage workers in your respective countries. We, of course, cannot force you to do that,
but we can offer you the lure of higher profits, if you employ lower wage Chinese workers."
Corporations in France, Italy, Belgium, Germany, Japan, the United States, leapt to the
opportunity, especially once diplomatic relations with the United States had been established.
And, Kissinger and Nixon did that in part to enable and facilitate corporations to become
more profitable. That was their ideology. That was their political practice. As the companies came,
and as they employed lower wage Chinese workers, and as their profits accordingly went up,
all their competitors back home began to realize "Wow, you better do the same, or else they're
going to out-compete you. They're going to be able to offer these products at lower prices because
they pay so much lower wages. And if you don't want to be out competed, you better develop your
branch, your operation, in China as well." And so the movement went from a trickle to a flood,
and American enterprises, most of the big corporations, became more and more active in China
as they continue to do right now as I am speaking to you. And as they employed millions and millions
of Chinese workers, paying them bigger wages than they had gotten in China before but still
way below what the American worker or the British worker or the Japanese worker got,
you began to develop a well-paid labor force in China. And they began to use their wages
to buy things, which allowed China to offer to the West, not just low wages, but a rapidly growing
consumer market. General Motors now sells more cars in China than it does in the United States.
China, by the 1990s and into this century, was able to offer to capitalists in the West not only
cheaper labor, better-educated, better-disciplined industrial workers, but the most rapidly growing
consumer market in the world. Either one of those would have brought capitalist companies to China.
Having both of them- unmistakable. It became, and has remained, a flood to make money.
The Chinese communist party also gave private capitalists inside China their opportunities. They
too could emerge, run a business, hire Chinese workers, serve the expanding Chinese market.
They allowed private capitalism, both domestic Chinese and foreign, to function and become
important partners in their economic development. They retained many industries, many companies for
the government in China. It is a very mixed economy: state-owned and operated enterprises
interacting side by side with privately owned and operated capitalist enterprises,
both Chinese and foreign. That's been their growth story of the last 30 years. It couldn't
have happened without the development of basic education and basic highways infrastructure
that was done before. It couldn't have been done without developing a Communist party
organized across China. The change in policy that happened after the 1970s
was made possible by what happened before the 1970s. Any argument that the Chinese success
is somehow peculiarly the responsibility of the capitalist part as opposed to the leadership of
the Communist party, or the remaining enormous state-owned and operated enterprise sector,
or all that happened before 1971, isn't historical analysis. It is bald ideological junk.