[electronic beeping]
[static hissing]
[female narrator] February 1979,
and the paramount leader of the People's Republic of China
is taking in a rodeo.
[crowd cheering]
Deng Xiaoping is the first Chinese leader
ever to tour the USA...
even getting a VIP tour of NASA.
After 30 years of isolation,
Communist China is suddenly back on the international stage.
And Deng is making it clear
that they're ready to embrace the world, economically.
He doesn't know it yet,
but that approach will work,
beyond all expectations.
The population of China is huge,
1.4 billion people,
more than North America, South America,
Australia, New Zealand,
Scandinavia, and all of Western Europe combined.
According to the Chinese government,
nearly 16% of the population
lives in China's 15 megacities,
each with a population of over 10 million.
There are only 47 such cities in the world.
As of 2018, China is responsible for 18.6%
of global gross domestic product.
It exports 41% of the world's computers,
34% of all air conditioners,
and a whopping 70% of the world's cell phones.
[ringing]
China has become a global economic powerhouse.
How did they pull if off?
And why was the rest of the world so slow to notice China's rise to the top?
[guns firing]
During World War II,
China and America are staunch allies
in the battle against Japanese imperial aggression.
And like America,
China throws itself into mass production
on an epic scale.
[man] Somewhere in China, a blanket factory in full blast.
Three thousand women, working with handlooms,
weave the blankets for the Chinese Army.
[narrator] But after fighting the Japanese,
China is torn apart by a brutal civil war
between the US-backed nationalists,
led by Chiang Kai-shek,
and the Communist army and its leader, Mao Zedong.
In 1949, Mao sweeps to victory,
establishing the People's Republic of China.
-[crowd cheering] -In Mao's China,
everyone is to share in the wealth.
-[sheep bleating] -And that collective community
will be represented by the state.
Also, China is to be completely self-reliant
-in terms of finance, food, and goods. -[pig squeals]
No more stock exchanges
and no more diplomatic or economic relations
with the capitalist West.
-China, and its 542 million people... -[crowd cheering]
...will be cut off from the rest of the world.
[gate clicking, slams shut]
To modernize his largely agrarian mega-nation,
Mao encourages millions of peasants to leave their farms
and work in factories.
[cheering]
And to make sure no one has a problem with that,
he launches the cultural revolution,
punishing dissenters by ordering them to reeducation camps.
[shouting]
Paramilitary groups attack bourgeois intellectuals.
[shouting]
Many cities are close to chaos.
At least a million die.
[chanting]
Meanwhile, China suffers from widespread famine,
a corrupt infrastructure,
and a busted economy.
It's largely ignored by the rest of the world.
In 1960,
China's economy is worth $59 billion...
a figure dwarfed by the United States economy,
worth $543 billion.
But in the early 1970s,
America decides it's time to win over Mao,
taking advantage of a rift
between him and his Communist counterparts in the Soviet Union.
Richard Nixon becomes the first American president
ever to visit China.
After 25 years of isolation,
Mao seems prepared to reestablish ties with America.
And Nixon hopes to encourage
an American-style democracy in China.
[somber classical music playing]
But when supreme leader Mao dies in 1976,
his autocratic system doesn't die with him.
It just takes a whole new direction.
Enter Deng Xiaoping.
When Deng takes China's reins at the end of 1978,
he makes it clear that, while his party is not going to relinquish any power,
China will consider opening up to the West
if they can make a little money out of it.
This is the reason for Deng's cheerful visit to America.
He's sending a signal to the world:
Communist China is open for business.
And they start by embarking on a program of economic reform,
creating four special economic zones, or SEZs.
The zones will be allowed to play by different rules
than the rest of Communist China.
Here, factories will be able to export goods to the West.
And importers will be able to trade
with capitalist countries.
The idea is that these zones will draw foreign investment
and serve as mini economic engines for the rest of the country.
And it works...
spectacularly.
[man] Just three years ago,
this area housed a few villages and paddy fields.
Today, it is a bustling commercial site,
an industrial city being built from scratch.
[narrator] China's leaders insist that these SEZs are just experiments
in global trade.
They remain dedicated to the ideals of Communism and Mao.
One of the first special economic zones
is the fishing village of Shenzhen,
population 59,000.
By 2016, its population swells to 12 million.
Its GDP per capita
increases an astounding 24,569%
Which explains why, over the next 30 years,
China will begin designating more and more
of these development zones.
By 2005,
China is constructing neighborhoods the size of Rome
every two weeks.
Between 2011 and 2013, China uses more cement
than the US did in the entire 20th century.
In these early SEZs,
factory managers take advantage of China's massive labor force
to crank out huge quantities of low-cost exports.
And productivity goes sky-high.
Setting up in the development zone means tax-free profits,
low-rents, and endless cheap labor.
In one SEZ, Guangdong province,
one commodity rules them all.
Toys.
With more than 1,500 toy factories,
this zone emerges as the world's largest toy production base,
exporting billions of dollars worth each year.
[man] Anywhere else, this is called capitalism.
Here, it's titled
"socialism with Chinese characteristics."
[narrator] Socialism with Chinese characteristics
is how China starts fulfilling huge consumer demand
for cheap goods in the West.
Economically, China's catching up.
But America's still number one.
Between 1980 and 1990, China's economy almost doubles.
But so does America's,
keeping it far ahead.
But with this opening up to capitalism,
China's leaders now have a problem.
Young people are increasingly demanding more
than just the right to pursue profits.
In the spring of 1989,
in Beijing's Tiananmen Square,
students begin leading daily protests
calling for democracy, free speech,
and a free press.
But on June 4th, the ruling Communist Party
sends the students a clear message:
Economic freedom is one thing.
Political freedom is something else.
Tanks and troops are dispatched to the square
and open fire on the demonstrators.
[guns firing]
The Chinese government never does release an official death toll.
But the event will become known internationally
as the Tiananmen Square Massacre.
[guns firing]
[ship horn blaring]
But while taking a stick to those protesting their authority,
China's leaders offer a carrot
to those interested in making money.
[overlapping chatter]
In December 1990,
they reopened the Shanghai Stock Exchange,
sparking stock market fever.
Money, money, money!
[man] Shares are on offer, and for the Chinese,
it's a riveting new game.
It's a chance to be a real capitalist.
[narrator] China's still a Communist nation,
but its transformation to a market economy
seems almost complete.
I dream of money, money. Yes.
-[woman laughs] -Owning money.
Getting money. I'll be millionaire very soon.
[laughing]
[narrator] What would Mao say?
By the end of the 1990s,
the signs of China's economic success are everywhere.
Memories of the civilians killed in Tiananmen Square
and the freedoms they were seeking seem to fade,
as workers' wages and their quality of living climb.
And foreign businesses rush to set up shop
to reach China's billions of consumers.
[engine revving]
[speaks Chinese]
Luxury items from abroad
become highly-coveted status symbols.
[horn honks]
But most Chinese citizens can't afford
expensive name-brand goods from overseas.
A massive demand for counterfeit goods emerges,
one that fuels a new boom for China's manufacturers,
accounting for up to 8% of China's GDP.
Okay, so here we have the new Bond DVD.
In fact, we have the whole Bond series here.
And this is just the tip of the iceberg
when it comes to China's counterfeit culture.
[man] Sometimes it feels like everyone's faking it.
Polo shirts, Burberry scarves.
No Western brand is safe.
[narrator] Soon, fake Chinese-made goods
are finding their way around the world.
And sellers of the real stuff aren't happy.
[man] This Chinese chocolate maker is being sued by its more famous rival.
Ferrero Rocher complained
the product is too close for coincidence.
This is Chinese name.
-This product is made in China. -Uh-huh.
-This, no. -Uh-huh.
This is just an English name.
-This is Chinese name. -Uh-huh.
[narrator] The thing is, China really wants
to join the World Trade Organization
to solidify its status on the world stage.
[applauding]
And it has President Bill Clinton's support.
Opening the economy of China,
the agreement will create unprecedented opportunities
for American farmers, workers, and companies
to compete successfully in China's market,
while bringing increased prosperity to the people of China.
[narrator] But those counterfeit goods become a real sticking point.
America insists that China's leaders
crack down on copycat manufacturing.
[applauding]
And China swears it will.
But as of 2019,
it's estimated that 85% of all the world's counterfeit goods
still comes from China.
Second place goes to Turkey, with 3%.
China's top five counterfeit goods are...
-[ringing] -...smartphones,
luxury brand bags...
-[footsteps] -...footwear,
sports clothes like Nike and North Face...
and it's estimated that 20% of cosmetics
on the market in China are fake.
[glass shattering]
In the 1990s,
the rest of the world also wants China
to open up its state-controlled markets
to more competition from outside.
They say it's not fair the Chinese government
blocks imports into China but still floods other countries
with its exports.
Again, China promises
to work towards balancing its trade.
And in November 1998,
America agrees to support China's entry into the WTO.
[cheering, applauding]
Earlier today, the United States and China reached an agreement
on the WTO.
This is a truly historic achievement.
[narrator] Clinton, like Nixon before him,
hopes that Beijing's authoritarian government
will loosen its grip over its people
once it opens up to doing more business with the West.
But that rosy-eyed optimism
may be what blinds foreign powers to the aggressive juggernaut
China's economy is becoming.
By 1998,
China's economy hits the $1 trillion mark.
But America is still way ahead,
hitting $9 trillion.
Then, in 2008, an economic crisis hits.
And this one is global, the worst economic disaster since 1929.
In the US, more than 2.6 million people lose their jobs,
1.8 million businesses shutter,
and 10 million homes are foreclosed in less than two years.
That December, China is hit too,
as exports to the US dry up.
People just aren't buying like they used to.
[automated voice] Ho, ho, ho-ho-ho-ho!
Merry Christmas!
[man] It's no laughing matter.
Someone canceled Christmas,
as China discovers that all that glisters
is no longer sold.
[crowd clamoring]
[narrator] Many Chinese factories shut down,
including one mega-factory that produces the symbol of the season.
[man] The world's largest Christmas tree factory
lies derelict.
All around here, you will find dozens of factories like this,
that have collapsed under the weight of empty order books,
an empty and rusting reminder
that, in the global economy,
the global downturn knows no boundaries.
[narrator] But remember, in China,
the state runs everything.
And China's new paramount leader, Hu Jintao, isn't worried.
They'll just use the state's deep pockets to make up for any losses.
[in Chinese] In order to develop a political system
that is socialist and democratic, we have to continue with the policy
of socialism with Chinese characteristics.
[narrator] With no free press or political opposition
to second-guess their policies,
the Chinese government swiftly authorizes
a $586 billion bailout.
And Chinese factories
quickly pivot from churning out goods for export
to making goods for domestic consumers.
For China, the crash of 2008
turns out to be less of a knockout
and more of a glancing blow.
Soon, they're ready to rise again.
Using its newfound economic leverage,
China starts quietly investing in far-flung developing nations
in Africa and Asia.
One of the most ambitious policies
is called the Belt and Road Initiative,
a vast series of infrastructure projects around the globe.
These include a 12,000-kilometer railway
stretching from Yiwu in coastal China
all the way to London...
a massive network of highways
connecting Eastern China to Pakistan's deep-water ports...
and a 1,833-kilometer pipeline
that can carry natural gas from Turkmenistan
across Central Asia to the Chinese border.
Around the world, China has invested
more than $1 trillion in infrastructure projects,
across dozens of countries.
[fanfare playing]
This latest strategy of China's newest leader, Xi Jinping,
really makes the West sit up and take notice.
Is China taking over the world?
[speaking Chinese]
[crowd chants in Chinese]
Supporters of China's international investments
say that these infrastructure projects
will lift millions of people out of poverty
and create jobs in poorer countries.
Critics say it's a land grab,
using checkbooks instead of swords.
Either way, it's increasing China's overall wealth
at an astronomical rate.
By 2018,
China's economy is closing in on America's.
It's not a matter of if,
but when China overtakes the US.
The best guess is by 2025,
making China the world's number one economic superpower.
Less than 50 years ago,
Nixon saw China as a struggling third-world country.
Today, it's China that the rest of the world
is playing catch-up to.
Most will agree that their brand of state-sponsored capitalism works
when it comes to making profits,
perhaps even better than America's messy democratic system.
But history tells us
nations are not built on economic success and power alone.
So how will China survive long-term?
Will people demand more choice,
more say in their own government?
Whatever its future,
it's safe to say no one is ignoring China anymore.
[percussion music playing]