The Role of U.S. Technology Transfer and Foreign Investment in East Asia and the Soviet Bloc in Opening China's Door in 1979

Abstract

The most radical component of China's Open Door economic policy in the late 1970s was its encouragement of joint ventures and other foreign direct investment (FDI). Although scholars have studied the impact of the new policy on China's economy and on the global economy, few have considered the background of the reforms. Drawing from relevant American business archives, contemporary news reports, and other primary sources, I argue that China's reforms in 1979 were likely influenced by three important dynamics: contributions of American joint ventures and other FDI to China's economically successful neighbors in East Asia and the attractiveness to China's reformers of enabling similar contributions in China; contributions of American joint ventures and other FDI to the Eastern European countries aligned with the Soviet Union, coupled with China's competition with the Soviet Union for expanded economic relations with the U.S.; and interactions between American leaders and businesspeople with Chinese counterparts.