By Angelo Giuliano
I get asked this question quite often, and the more I think about it, the more I believe it is one of the questions that gets overlooked in the current debate about China.
Why did the West push China into the WTO? Why did Western companies move so much of their manufacturing there? Why did they invest billions in China and share technology and know-how? And why, if China was supposedly going to become such a threat, did Western governments spend years encouraging deeper economic integration with Beijing?
The usual answer today is that China somehow cheated its way to the top.
I don't think that explanation is good enough.
What was the original idea?
When China joined the World Trade Organization in 2001, this was not simply a story about reducing tariffs and selling more products.
There was a much bigger political idea behind it.
A lot of people in Washington and other Western capitals believed that if China became richer, more integrated into the world economy and more exposed to Western business, China itself would gradually change. Economic liberalisation was expected to encourage wider political and social liberalisation as well.
In simple terms, the assumption was that capitalism would eventually change the country.
That was the bet.
And looking at China today, it is pretty clear that the bet did not work out in the way many expected.
China became much richer. It built an extraordinary industrial base, invested heavily in infrastructure and education, developed its own companies and moved steadily into more advanced technologies.
But it didn't become politically Western.
In fact, the opposite happened in one important sense: China became much stronger and much more independent.
Western business wanted to be there
There is another part of this story that tends to disappear from the discussion.
Western companies wanted to move production to China.
They weren't forced to do it.
The commercial logic was obvious. China had a huge workforce, increasingly sophisticated infrastructure, enormous manufacturing capacity and rapidly developing supply chains. Companies could produce goods more cheaply and sell them at competitive prices around the world.
For shareholders and executives, this made sense.
For consumers, it often made sense too. We got cheaper electronics, clothes, household goods and thousands of other products.
Nobody was complaining very loudly when the system was producing cheaper products and higher corporate profits.
Technology and know-how also moved into China as Western companies expanded their operations. Some of this happened through investment and joint ventures, some through normal commercial cooperation and some through China's own policies and requirements.
But the important point is that Western business participated because it believed the benefits were worth it.
China didn't stay at the bottom
The part that seems to have surprised many people is what happened next.
China didn't remain a country producing cheap products for Western brands forever.
Why would it?
If you build factories on that scale, you eventually develop engineers, suppliers, logistics networks, research capabilities and companies that understand how the whole production process works.
Once that industrial ecosystem exists, it becomes possible to move into higher-value industries.
And that is exactly what China did.
Chinese companies started developing their own technology, building their own brands and competing in industries that Western companies had previously dominated.
Electric vehicles are an obvious example today, but the same story can be seen in batteries, solar technology, telecommunications, machinery, shipbuilding and many other sectors.
The low-cost factory became an industrial competitor.
The "China Shock" needs some perspective
Of course, there were costs for Western economies.
The China shock was real, particularly for certain American manufacturing communities. There is serious economic research showing that increased Chinese import competition contributed to factory closures and job losses in some parts of the United States.
But saying that China single-handedly destroyed Western manufacturing is another matter.
Manufacturing was already changing because of automation, productivity improvements, technological development and globalisation. American manufacturing employment had been declining for years before China entered the WTO.
So I don't buy the argument that China simply came along and destroyed Western industry.
China certainly increased the competitive pressure.
But Western companies also made the decision to move production overseas because it was cheaper and more profitable.
That distinction matters.
So who made the decisions?
This is where I think the current political debate becomes a little dishonest.
China didn't force European or American companies to close factories and move production overseas.
China didn't force Western governments to support globalization.
China didn't force consumers to buy cheaper Chinese products.
Those were decisions made in the West.
At the time, they were considered rational economic decisions.
And in many cases, they were.
The problem is that the people making those decisions may have underestimated what happens when a country as large as China is given access to capital, technology, markets and global supply chains and then decides to build its own capabilities.
China didn't just participate in globalisation.
It learned from it.
It invested the money.
It built the infrastructure.
It educated the workforce.
And eventually it became very good at competing.
The assumption that went wrong
This is probably the part of the story that interests me most.
What did Western policymakers actually think would happen?
Did they expect China to become wealthy but remain dependent on Western technology?
Did they expect Chinese companies to manufacture products for Western brands indefinitely?
Did they genuinely believe that economic integration would eventually bring political convergence?
I suspect many people did.
And perhaps that was the fundamental mistake.
There was an assumption that becoming richer would automatically make China more like the West.
Instead, China became richer while maintaining its own political system and pursuing its own development model.
The economic integration happened.
The political transformation did not.
Now the West wants to change the rules
Today, we hear completely different language from Washington and European capitals.
There is talk about tariffs, reshoring, supply-chain security, "de-risking" and reducing dependence on China.
Some of these concerns are perfectly legitimate. Countries have every right to think about national security and strategic industries.
But there is something missing from the discussion.
How did we get here?
We got here because for decades the economic relationship was considered beneficial.
Western companies made money in China. Consumers bought cheaper products. Investors benefited. Governments enjoyed the advantages of global trade.
And China used the opportunity to develop.
That last part is now treated almost as though it was some unexpected trick.
But what else was China supposed to do?
If a country is given access to global markets and has the ambition to develop, it is hardly surprising that it will try to become more productive, more technologically advanced and more competitive.
China did exactly that.
The real mistake
So I don't think the biggest mistake was allowing China into the WTO.
The bigger mistake was believing that economic integration would inevitably change China into something the West would find more comfortable.
The West wanted China to join the global economy.
China joined.
The West expected China to become more like the West.
China didn't.
Instead, it became richer, more industrialised, more technologically capable and considerably more independent.
And now we are having a very different conversation because the country that was once seen primarily as a manufacturing opportunity has become a serious competitor.
That doesn't mean China is always right, and it doesn't mean every Western criticism of Beijing should be dismissed.
But if we are going to have a serious debate about China's rise, we should at least be honest about the history.
The West helped build the conditions for China's rise because it believed doing so would serve Western interests.
Western companies moved production there because it was profitable.
Western consumers bought the products because they were cheaper.
Western governments supported integration because they believed it would bring economic and eventually political benefits.
China simply took the opportunity and developed.
Perhaps the uncomfortable lesson is that the West didn't make a mistake by allowing China to enter the global trading system.
It made a mistake by assuming that, after becoming wealthy, China would stop being China.
That assumption has turned out to be much more consequential than China's WTO accession itself.
The views do not necessarily reflect those of DotDotNews.
Read more articles by Angelo Giuliano:
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