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It doesn't matter whether a cat is black or white--so long as it catches mice.
The current phase of Chinese history. After the Cultural Revolution escalated Up to Eleven, to the point that even Mao Ze Dong regretted it, the red guards were arrested and subjected to reeducation. Perhaps more important than internal factors, however, would be Richard Nixon when he visited to China in The Seventies. Picking up on the fact that China and the Soviet Union had gradually fallen out of each other's favor (ironically, the original reason for this was because Mao felt the Soviet Union was growing less aggressive towards the West under Nikita Krushchev), Nixon had the idea of courting China into the American sphere of influence. At the time he flew to Beijing and met with Mao, both leaders were grossly unpopular with their people, but their agreement to negotiate ties between their nations would have lasting effects. Trade began to pick up between the two superpowers, with the positive effects that such trade tends to have.
Soon after, Mao died in 1976, and the reform-minded Deng Xiaoping finagled his way into power. Taking advantage of the changing world, Deng pushed through many economic reforms, arguing that "Poverty is not socialism," and that experimenting with capitalism was, in a nutshell, the best means to achieve the nation's stated communist ends. Leading the charge were "Special Economic Zones," mostly coastal cities with looser economic controls meant to attract foreign investors (There were some fairly Unfortunate Implications in the fact that many had been "treaty ports" seized by Western powers as semi-colonies events like the Opium Wars, but again; the ends justified the means); these lessened restrictions plus the much lower wages tolerated by Chinese workers, ironically as a result of poor economics in the many preceding decades, ensured that many foreign corporations would move their operations in. (Turn over your mouse and examine it right now; chances are it was made in China, along with most other things you own.) The enriched Chinese inhabiting the cities were then presumed to reinvest their own money inland.
Intensifying such changes, in The Nineties, the Soviet Union fell, seeming to imply that more hardline communist nations were doomed, and Britain returned control of the rather capitalist Hong Kong to the mainland government, giving considerable influence to the course of greater Chinese affairs. By The New Tens, things have taken off, big time. China is a massive economic powerhouse, considered to be a modern superpower, a space power, and generally, an amiable enough member of the international community. It's the second richest country in the world today (and steadily growing). Futuristic skylines rise from the cities, where a growing urban middle-class works and plays, just like their peers in Japan, Europe and America.
However, all is not fine and dandy. Even though the modern People's Republic is ultra-liberal by Maoist standards, it remains an authoritarian specter looming over the West. It's all the more troubling because those who lived through the Cold War were used to believing that communist dictatorships were doomed to fail. The end of the Cultural Revolution may have ceased the political attacks against Chinese heritage, but there's little anyone can do when gorgeous classical architecture is demolished to make way for freeways and apartment blocks needed to accommodate the growing urban population, or when the people dump traditional ways in favor of emulating the imported culture they pick up on TV. The Bicycle City is now full of cars, and hence, pollution and smog clouds. China has ten of the world's most polluted cities, and much of the inner countryside is under threat as natural environments are chopped down and turned into farmlands. There has been a growing Was It Really Worth It? sentiment among some of the Chinese citizenry who wonder if their society has lost something in their relentless pursuit for getting rich, especially in the aftermath of the Wang Yue debacle.
The government occasionally cracks down on the population again, disturbing to citizens of the "free world" who feel that it's their outsourced dollars that are allowing it to do so. With the current economic troubles in the West, many feel it's only a matter of time before China Takes Over the World, for better or for worse. Though, at the moment, China still has a very bad wealth to population ratio (ranked 90th in the world, whereas the US is 6th) and it's economy is still well less than half the size of the United States or European Union.
But what is China, anyway? Is it a centralized bureaucratic empire ruled by tradition? A zealous communist police state? A Mad Science experiment obsessed with progress at all costs? Probably nobody knows anymore--not even the Chinese themselves.