The story of U.S. assistance in integrating China into the global economy—culminating in America’s support for China’s entry into the World Trade Organization (WTO) in 2001—has, over the past two decades, contributed to U.S. complacency and overconfidence.
The Narrative of “U.S.-Enabled China”
In 2001, China formally joined the World Trade Organization (WTO), an event widely portrayed in the West as a testament to American strategic foresight and benevolence. From the U.S. perspective, China’s accession was framed as the result of deliberate negotiation and support, integrating the country into the global rules-based trading system. Policymakers argued that exposure to international markets would gradually liberalize China’s economy, encourage democratic reforms, and align its institutions with Western norms. Media and academic commentary often reinforced this narrative, presenting China’s economic rise as a product of Western guidance and depicting the United States as the indispensable architect of a more open and stable global order.
At the time of accession, mainstream economists both in the West and in China expressed profound skepticism about the country’s prospects, particularly in finance, automobiles, and agriculture. China’s financial sector faced high levels of non-performing loans and unclear property rights, with state-owned banks operating under soft constraints that limited efficiency. The automotive industry lagged decades behind Western technological standards, while agricultural production suffered from outdated techniques and insufficient scale. Many predicted that these structural weaknesses would prevent China from competing successfully on the global stage.
Yet within a decade, China’s trajectory defied these expectations. The four largest state-owned banks rose to rank among the world’s top ten, surpassing even the most prominent American institutions. China became the global leader in automobile production and sales, rapidly closing the technological gap with Western competitors. Its agricultural sector not only achieved unparalleled output but also offered a remarkable diversity of products that surpassed those of many developed nations. In addition, China’s vast production of small commodities and electromechanical goods—affordable yet high-quality—disrupted the long-standing dominance of American and European manufacturers, compelling Western economies to resort to anti-dumping measures and to deny China market economy status in defense of their own industries.
This unexpected success highlights fundamental misconceptions in conventional economic theory. If one assumes that private enterprises are inherently more efficient than state-owned or mixed economies, China’s competitiveness should have been limited. In reality, China’s advantages stemmed from economies of scale, which allowed large-scale production to reduce average costs and strengthen its position in the international division of labor, consistent with Adam Smith’s insights. This empirical reality challenges neoclassical assumptions that economic growth relies solely on decreasing or constant returns to scale. Under conditions of increasing returns, markets do not naturally stabilize, and the “invisible hand” cannot ensure equilibrium, contradicting standard Western economic predictions.
The narrative of “U.S.-enabled China” thus serves a dual purpose: it reinforces the image of American moral, strategic, and economic supremacy while obscuring the agency and policy acumen of China itself. By portraying China’s rise as the product of Western guidance rather than endogenous innovation, this perspective conveniently frames the United States as indispensable in shaping the global economic order, even as empirical evidence increasingly demonstrates the limitations of such a view. China’s experience exposes the contradictions in orthodox economic theory and challenges the assumption that market liberalization alone dictates international success, offering a profound lesson in the complex interplay between state strategy, industrial policy, and global competition.
How This Narrative Fostered Complacency
Over the past two decades, a pervasive narrative has shaped U.S. policy and public perception regarding China’s rise, fostering a sense of complacency and strategic overconfidence. Central to this narrative was the belief that China’s economic ascent was primarily the result of U.S. assistance, rather than its own strategic planning, domestic reforms, and long-term industrial policies. By framing China as a passive beneficiary of American-led globalization, policymakers and the public underestimated the agency, foresight, and resilience embedded in China’s development strategy.
China’s multi-decade exclusion from global high technology markets under the CoCom and later Wassenaar embargoes, beginning in 1949, created severe constraints on its access to advanced technologies. Yet these very restrictions incentivized indigenous research and development, domestic technical learning, and strategic industrial policy. Instead of simply replicating foreign technology, Chinese firms learned to absorb, adapt, and ultimately re-innovate, creating homegrown capabilities that underpinned future global competitiveness. A notable example is BOE’s development of TFT-LCD production lines in the 1990s and 2000s. With limited foreign access, BOE cultivated domestic engineering expertise and manufacturing capacity, demonstrating how constraints catalyzed technological self-reliance. Similarly, China’s investment in STEM education—producing 4.7 million new graduates in 2016 compared with 568,000 in the United States—enabled a systematic process of introduction, digestion, absorption, and re-innovation, turning imported technologies into indigenous competencies rather than mere replicas.
When China joined the World Trade Organization in 2001, many international observers expected it to specialize in low-value, labor-intensive industries such as textiles, toys, and basic electronics, in line with classical trade theory like the Heckscher-Ohlin model. Yet China approached WTO accession with strategic calculation. It leveraged global trade rules to integrate into the world economy while retaining control over critical sectors, protecting intellectual property domestically, and gradually building global competitiveness in high-value manufacturing, technology, and finance. This misperception—that China owed its success to U.S.-led liberalization and would automatically conform to Western norms—masked the deliberate long-term planning underpinning China’s rise.
At the same time, U.S. policymakers assumed that economic integration would naturally produce political liberalization. There was a widespread belief that market forces and the rules of the liberal international order would gradually align China with Western norms and behaviors. This assumption contributed to strategic complacency: critical manufacturing was outsourced, supply chains were ceded, and investments in industrial resilience were neglected. Even in high-stakes sectors such as semiconductors, decision-makers dismissed the strategic importance of technological autonomy, as exemplified by Michael Boskin’s infamous 1992 remark: “Potato chips, computer chips—what’s the difference?” The prevailing mindset relied on the notion that the U.S.-designed international system was inherently self-correcting, leaving America unprepared for China’s deliberate, state-led efforts to convert global integration into enduring economic and technological advantage.
In sum, the narrative that China’s rise was largely enabled by the United States obscured the country’s domestic capabilities, strategic foresight, and disciplined industrial policies. It fostered overconfidence in the liberal global order, encouraged strategic complacency, and contributed to a persistent underestimation of China’s capacity to translate initial constraints into long-term innovation and global leadership. The result was a decades-long misreading of China’s trajectory, one that conflated opportunity with control and assumed that prosperity imposed liberal norms—a miscalculation that continues to shape U.S. strategic debates today.
How Hubris Emerged
Over the past two decades, a sense of hubris emerged in U.S. perceptions of China, rooted in both moral and strategic misjudgments. On a moral level, many American policymakers and the broader public viewed themselves as the benevolent architects of global prosperity, assuming that China should be grateful for access to international markets. This perspective fostered an implicit sense of entitlement: the belief that by facilitating China’s economic growth, the United States had earned not only China’s gratitude but also its loyalty and alignment with Western norms. The notion of a “Pax Americana” reinforced this view, portraying U.S. global dominance as inherently stabilizing and morally justified, while ideas such as Thomas Friedman’s “Golden Arches Theory” suggested that prosperity could only be realized within a U.S.-led international order. In this framework, the U.S. assumed that economic integration alone would align China with American interests and values.
Strategically, this moral hubris translated into a persistent underestimation of China’s long-term planning capabilities and domestic institutional strength. U.S. policy often prioritized short-term gains, influenced by electoral cycles, shareholder-driven quarterly capitalism, and a cultural aversion to long-term strategic thinking. This focus on immediate returns led to a delayed recognition of China’s ability to exploit global rules to its advantage. During the early 2000s, American assumptions frequently rested on the belief that China lacked the capacity to challenge U.S. global dominance. As a result, policymakers were slow to identify emerging strategic risks across technology, finance, and military domains, giving China the latitude to consolidate capabilities in ways that were underestimated by outside observers.
American analysts also misread the nature and intent of China’s economic development. Influenced by Solow’s exogenous growth theory, they treated technological progress as an external factor, assuming that poorer countries could only grow by adopting existing technologies from the developed world. While the theory allowed for convergence in principle, it failed to account for domestic innovation strategies and policy-driven technological advancement. In China, initiatives such as “Made in China 2025” and the dual circulation strategy reflect a deliberate effort to reduce dependence on foreign trade, enhance domestic capabilities, and position China as a self-directed global actor. By framing China’s achievements as derivative of U.S. actions, American observers interpreted Chinese economic and technological advances as contingent rather than intentional, encouraging the perception that any challenge to U.S. dominance was merely opportunistic or ungrateful.
This combination of moral and strategic hubris, compounded by misreading Chinese intentions, created a conceptual blind spot. U.S. policymakers tended to view China as a reactive participant in a rules-based global order, rather than an autonomous power with its own historical imperatives and long-term strategies. Consequently, the narrative of “U.S.-enabled China” obscured the deliberate and sophisticated ways in which China leveraged both domestic innovation and global engagement to advance its national interests. The result was a persistent underestimation of China’s capacity for self-directed growth and strategic planning, fostering complacency that shaped American policy and public perception for decades.
Consequences Over Two Decades
Over the past two decades, the narrative that the United States had facilitated China’s integration into the global economy fostered a sense of complacency and hubris within U.S. policymaking circles. This mindset underestimated China’s agency and strategic sophistication, creating vulnerabilities in critical areas such as semiconductors, rare earths, and supply chains. China, in contrast, systematically turned these dependencies into sources of domestic capability, following a broader industrial principle of introduction, digestion, absorption, and re-innovation. A striking example of this approach was China’s development of high-speed rail (HSR) in the early 2000s. Faced with the challenge of building world-class HSR without domestic technical know-how, the Ministry of Railways devised a sophisticated “trading market for technology.” By leveraging the enormous domestic market, foreign firms could only secure lucrative contracts if they agreed to transfer core technologies. China combined competition leverage, phased technology transfer, local manufacturing requirements, financing power, and knowledge absorption to transition from a technology importer to a global HSR leader within a single decade. WTO membership further reinforced this trajectory, enabling China to modernize industries, integrate into global value chains, and expand its influence worldwide.
At the same time, U.S. responses to China’s rapid economic ascent lagged behind strategic developments in technology, trade, and military innovation. The rise of companies such as Huawei, the Belt and Road Initiative, and state-backed innovation programs were all underestimated because of the persistent assumption that China remained dependent on the West. This miscalculation was reinforced by ideological rigidity: the United States assumed that economic liberalization would inevitably produce political liberalization, failing to anticipate the distinct trajectory of China’s governance model. The extended U.S. wars in Iraq (2003–2011) and Afghanistan (2001–2021) further diverted attention and resources, creating a strategic environment in which China could expand its global influence with relatively less immediate pressure. The corruption and governance failures observed in post-war Iraq and Afghanistan exemplified the limitations of U.S. democracy promotion and underscored the misjudgment of China’s independent path.
The narrative of a “U.S.-enabled China” also shaped allied perceptions, fostering the belief that China’s rise would unfold within a framework largely controlled by the United States. When China pursued independent global initiatives outside Western expectations, these assumptions contributed to strategic surprise. In sum, the combination of U.S. complacency, underestimation of China’s policy sophistication, and rigid ideological assumptions allowed China to convert external dependencies into domestic strengths, modernize key industries, and assert its global presence in ways that challenged established expectations. The result has been a transformation of the global economic and strategic landscape, driven by China’s calculated leveraging of market access, technology acquisition, and institutional innovation.
Narrative Lessons
History offers powerful lessons on the interplay between openness, sovereignty, and strategic foresight, as illustrated by the contrasting experiences of China and India during the early modern period. Emperor Qianlong of the Qing Dynasty famously resisted British trade overtures, preserving China’s independence through the restrictive Canton System. While this policy limited immediate commercial engagement, it safeguarded Chinese sovereignty and delayed foreign penetration. By contrast, the Mughal Empire under Emperor Jahangir welcomed English merchants, granting them unprecedented freedoms to trade, settle, and operate across his dominions. Jahangir’s openness, expressed in his letters to King James I, exemplified a generosity and trust in foreign commerce that ultimately undermined his empire’s autonomy. Within a century, the British, initially tolerated as trading partners, expanded their influence to dominate India, reducing Jahangir’s successors to puppet rulers. China, by keeping foreign powers at arm’s length, avoided such direct subjugation, demonstrating the complex trade-offs between engagement and sovereignty.
The patterns of historical hubris are echoed in modern geopolitics. The narrative that the United States “enabled” China’s rise through support for its accession to the World Trade Organization in 2001 mirrors the overconfidence that often accompanies power. American policymakers framed China’s integration into the global economy as a benevolent act, assuming that exposure to international markets would automatically liberalize China and align it with Western norms. This perspective underestimates the strategic foresight, institutional capacity, and domestic initiative of the Chinese state. Similarly, claims that Japan’s Official Development Assistance or Taiwanese investment alone “made” China’s modernization possible diminish the central role of Chinese labor, innovation, and policy ingenuity. Such accounts, particularly prevalent in social media and public discourse, exemplify a form of retrospective moral hubris: attributing another nation’s success to one’s own actions while framing any perceived ingratitude as proof of misaligned values.
The consequences of this hubris are significant. By believing itself the enabler of China’s rise, the United States risked underestimating China’s agency and long-term strategic planning. Just as Qianlong’s cautious management of British trade preserved sovereignty, China’s careful integration of global commerce has been leveraged to strengthen domestic autonomy and technological capacity. Western assumptions that trade alone could dictate political or social outcomes overlook the disciplined, stepwise strategies—introduction, absorption, adaptation, and innovation—through which China transformed engagement into indigenous capability. History repeatedly demonstrates that openness without strategic prudence can invite domination, while calculated engagement, even under the watchful eye of external powers, can secure autonomy. Recognizing this dynamic provides a sobering reminder that power is not only exercised through immediate influence but also through the strategic patience and agency of those one might underestimate.
Conclusion
The U.S. portrayal of itself as the facilitator of China’s integration into the global economy encouraged complacency and a sense of moral and strategic superiority, while obscuring China’s autonomous decision-making. Over the last two decades, this mindset led to underestimating China’s rapid economic development, modernization, and strategic influence on the world stage.