In 1978, China's government formally decided on an economic path called the "Four Modernizations". China aimed to develop both economically and militarily through trade; in terms of US relations, China would put its massive labor force to work in producing things Americans wanted in exchange for US currency, US technology, and industrial production know-how. A peg on the powerful US dollar allowed China's economy and government to grow and remain stable. The high Chinese private and public savings rate caused by this pegging policy promoted stability in the Chinese economy at the expense of both private and public consumption of goods and services.

...