China in the late 1990s basked in its status as the undisputed number one power in Asia. Japan’s economic growth was slowing down. India was rising in power, but it still had a long way to go to truly be able to compete with China. The Russian and Belarussian Federal Republic (which everyone just called Russia) was trying to salvage its situation after the disastrous final decade of the Soviet Union. Chinese goods filled the shelves all around the world. Chinese celebrities found new popularity in foreign markets. Millions of foreigners would study Chinese, which seemed to be the language of the future. It was a time of great optimism. And China was ready to capitalize on its newfound power.
The collapse of Communism worldwide was nearly complete by the end of 1996. Both the Soviet Union and the Democratic People’s Republic of Korea fell that year. Mongolia was beginning its transition into a capitalist economy. Chinese businessmen sensed opportunity. New markets were open to Chinese goods and Chinese businesses. Mongolian leadership released, even before the fall of the Soviet Union, that it would need to maintain friendly relations with China if it wanted to remain independent. And that meant being open to Chinese business. Though some Mongolians got rich doing business with China, others were upset, claiming that China was exploiting the country for economic gain. This led to the formation of a Mongolian Eco-Fascist movement that sought to expel the Chinese and sought to reclaim parts or all of six Chinese provinces.
North Korea was another market opened up to China. North Korea desperately needed help, as the country was facing food shortages. It had traditionally relied on support from the Soviet Union, but the Soviet successor state of the RBFR was unable (and had no desire) to prop up the North Korean economy. South Korea, China, and the United States would provide the bulk of aid to North Korea. Chinese and South Korean businesses almost immediately began to move into the country. At first was uncertain whether North Korea would become more economically integrated with China or with South Korea. However, the people who ran the new North Korean government were nationalists intent on reunification with the South. Northern and Southern leaders signed a series of free trade agreements in the late 90s. There was also nearly complete freedom of movement between the North and South, something that did not exist between North Korea and China. While political integration was not a done deal, economic integration between the two Koreas was already underway.
China desired to have good relations with the post-Soviet states. Lien Chan hoped to make Central Asia part of a Chinese sphere of influence. He received criticism from ultra-nationalists for not pushing some of China’s historical claims in the former Soviet Union. The origins of the modern Chinese far-right (as opposed to Chen Lifu’s CC Clique that died with him in 2001) can be tied back to dissatisfaction with Chinese foreign policy in the 90s. China and the RBFR hoped to get an oil pipeline built between the two countries, and negotiations began in 1998 to get one built. However, domestic problems in Russia would postpone the pipeline’s construction. That same year, the ROC and the RBFR mutually agreed to removed tens of thousands of landmines on their shared borders.