Now, it seems, all is about to change, with the agreement China has reached with President Bill Clinton on entry to the World Trade Organisation (WTO). Businesses inside China will compete on world markets. Growth - already faster than in any other major economy - will accelerate. China, already the world's ninth-largest exporter, is predicted to sell more than Japan within five years. The agreement with the US has been hailed by Goldman Sachs, for example, as the "last great economic deal of the second millennium".
Time to lie down and take the tablets? Well, not quite. Admittedly, China writes its own laws of large numbers, not least in the minds of Westerners. The most obvious is a tendency to swing from bedazzlement to alarm and back again. In the early days of economic reform, back at the beginning of the 1980s, the prospect of 1.2 billion people getting even a little richer wildly intoxicated Western businessmen. Since then the Chinese have got a lot richer than its leaders forecast. The size of the economy has increased sixfold since 1978. Yet, by the mid-1990s, Western euphoria had collapsed. Alarm at the cost of reconstructing the banking sector, the threat of a devaluation spiral, the lurch from inflation to deflation - suddenly China was no longer seen as tomorrow's world economic leader, but as the next and biggest Asian basket case.
So what has changed again now? Surely not just America's "China deal", whose timing is so obviously driven by President Clinton's need to save himself from a dismal flop in Seattle? It came, after all, barely a fortnight before the members of the WTO assemble - without much enthusiasm - to launch the next round of global trade negotiations.
When politicians are at risk of that kind of embarrassment, they are not inclined to peer into the mouths of gift horses. And this deal with China is the same nag, give or take a little grooming, that was rejected by the White House when it was offered by China's leaders in the spring.
Nor is the deal completed. In the US there is still a volatile pre-election Congress to be brought on board. There will have to be parallel agreements with Europe, with developing countries - with all the overlapping mini- clubs that build shakily into a consensus in the WTO. Trade barriers will not tumble as fast as the Clinton deal suggests. They never do. Yet, even after a healthy dose of scepticism, this deal looks immensely significant. As far as the US is concerned, it is a breakthrough - recognition in the White House that the former rejection was a big mistake, and one Congress will be wary of repeating.For the spring debacle did not merely hold things up; it seriously threatened the delicate mechanism of economic evolution inside China, dangerously undermining the reformers. Accepting much the same deal repairs that damage, anyway. And no one seriously supposes, with the US signed up, that other nations will block a deal.
The West calculates that once engaged, China is committed to the process, if not the timetable. For China, the calculus is more complicated. International competition will, over time, stimulate productivity and raise growth. In the short term it will increase import penetration. What is clear, therefore, is that a reduction in tariff barriers raises the stakes in the liberalisation gamble.
Large parts of Chinese state-owned enterprise would (indeed, should) be bankrupted by exposure to international competition. This "shock" looms at a time when China is struggling with the hideously expensive reconstruction of its financial institutions, which may absorb up to a quarter of its national income. This threatens to mire the country in severe domestic deflation.
China desperately needs external demand to compensate for this. In particular, it needs American demand. But the scale of its trade surplus with the United States has reached make-or-break point. China had to go forward to liberalisation or risk being pushed back out of American markets by an angry Congress.
Only a year or so ago, Western disbelief in China's ability to manage this high stakes game was widespread. This was partly because liberalisation itself had taken a knock throughout South-east Asia - after the crash, the arch-priests of market reform in Western international institutions were donning sackcloth and ashes. China's devaluation in the first half of the decade was seen as the first domino, and another was feared imminently.
China, however, managed to grow through the Asian crash, its credibility magically enhanced and its foreign exchange reserves rebuilt through rising exports. Its exchange rate is still uncomfortably high, but - wisely or otherwise - the expectation that it can manage a smooth depreciation has grown.
Yet these are still dangerous times. A communist regime that has adopted one self-contradiction - privatisation - is now signing up to another; the abdication of control by national politicians to international markets. In theory, the programme agreed with the US would make China more open than many existing WTO members: a 25 per cent cut in tariffs, up to 75 per cent on automobiles; Western entry into telecoms markets; and access for financial institutions to Chinese savers. Dream on; China today is the most closed of all economies among its Asian neighbours and competitors, and that is not going to change overnight. Nor is its leaders' strong grip on the levers of economic control.
And ironically, China is opening itself to international competition at a time when Western popular sentiment - as we will see in Seattle - has turned noisily against free trade and globalisation. Admittedly, much of the Seattle noise will express sentiments most Chinese would see as the luxuries of affluence; concern for environmental protection, animal welfare, labour rights. But rapid industrialisation will bring these and other pressures to the fore soon enough in China, too. Which is, of course, part and parcel of the hopes of those who do not just want to make a fast buck out of trade liberalisation, but believe that a successful transition to a market economy in China will bring democracy in its train.
They believe that the growth of a business class, operating confidently in a global market place run according to Western rules, must be a powerful force for political reform.
Well, let's hope. The WTO deal does indeed mark a historic moment along the learning curve of China's political class, a recognition of the impossibility of maintaining walls around their society. With trade flows technology, and with technology comes free information, the oxygen of reform.
All that can be predicted, and in quite short order, too. But even as the Asian financial crisis fades into history, and Japan finally shows signs of growth, questions remain about the evolution of the Western economic model in Asia. Certainly, liberalisation should stimulate the growth of a formidable business class inside China, but within what socio-economic model it is much less easy to guess. And if that is still open to question, heaven help those who try to forecast China's politics.