In the 80's there was no domestic market to speak of, they were engaged in the messy business of arbitraging low labor costs and trying to concentrate their meagre public funds to invest in coastal infrastructure, while pursuing vast fiscal repression through the state-owned banks to ensure the proceeds of export earnings in turn became accessible to the government to invest. A useful virtuous cycle, but it only goes so far.

By 2000 there was actually a domestic market, and over the 1990's they started to move towards trading access thereto for know-how and further FDI.

By 2006-10, you see another transition. One of the next logical steps was undertaken; spend money on R&D and entice foreign researchers to come to or come back to China to help drive productivity, most especially TFP, now that physical infrastructure needs have fundamentally been met.

The other needed step would have been to start shoring up the mechanisms by which they could encourage household consumption, wind down the vast fiscal transfers to exporters from the citizenry, and start consuming more of the fruits of their own labor. They'd be both a more widely appreciated participant in global trade and far, far less dependent on foreign markets to sustain domestic employment. Even if the US and EU got pissy over their competition, they'd have been perceived as lacking the moral high ground, and it's highly unlikely that the CCP would have come to be so dependent on repression and coercion for 维稳.

Unfortunately, as Pettis, Klein, and others have made very clear, this last transition is damned near impossible for political reasons, and has basically only ever occurred in the US and the rest of the Anglosphere, and to a lesser extent in a few European nations. Even Germany, Japan, and South Korea remain stuck in "export competitiveness" mode, to the great detriment of their citizens. China has far too many vested interests pulling for the high-investment, high-export, low-consumption status quo to be able to shift against it. Dual Circulation is a sham and will never do the job.

And so here we are. Ugh.