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"This was the week that changed the world."

-- President Richard M. Nixon in Shanghai, China, in February 1972.

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This month marks the 40th anniversary of Nixon's diplomatic "opening" to the People's Republic of China, also known as Red China. With hindsight, we can say that this was one of the 20th century's major events because it a.) helped America win the Cold War by dividing the Communist superpowers; b.) opened up the world's most populous nation to American business; and c.) began the creation of the world's largest market, with China having the fastest growth rates of any major country over the last generation.

As historian Steve Cummings points out, for roughly 15 of the last 20 centuries, China (by far the world's most populous country) was one of the world's superpowers. After more than 100 years of isolation, China began to re-emerge as a world player in the 1970s. Nixon's visit to China recognized that "it would be impossible to run the world if Red China weren't part of it."

China now has the world's second largest economy, the largest standing army and the largest middle class (in worldwide terms). China is currently on track to surpass the United States economically by 2030. The U.S.-Chinese rapprochement really was an earth-shaking event.

Chinese civilization is more than 7,000 years old and for years, one of the most technologically advanced nations in industry (especially the fabled Oriental silk trade) and the arts. Europeans were always intrigued by China's exotic culture and lucrative market. Western travelers, typified by Marco Polo, often returned with tales of the wonders of China -- and business quickly sought to tap them. The "Silk Road" that connected China to the West 2,000 years ago helped lay the foundation for the world trading system.

Ancient China was not only industrious but powerful. After the fall of the Roman Empire, China had the world's largest standing army, one-third of the world's population and the world's largest economy. But in the 19th century, more than a century of decline began. Japan invaded China in 1931 and after Japan was defeated in 1945, the Chinese civil war -- between the Communist faction led by Mao Zedong and the Nationalists led by Chiang Kai-shek -- ended with the Communists victorious and the Nationalists exiled to Taiwan.

The new regime dubbed itself the People's Republic of China. When China signed an alliance treaty with the Soviet Union, the United States refused to recognize Mao. And after Chinese forces intervened during the Korean War in 1950, successive American presidents ordered virtually no contact with China for the next two decades.

As a Californian, Nixon grew up with Asian-Americans. He had political allies in San Francisco's Chinatown, the nation's largest enclave of Chinese immigrants. His first set of memoirs quoted a number of Chinese proverbs. (In light of Watergate, perhaps he should have remembered this one: "Before setting out on a course of revenge, make sure that you dig two graves.")

During his early career, Nixon was a fervent anti-Communist, heartedly approving of Gen. Douglas MacArthur's suggestion that the United States bomb China during the Korean War. As late as 1962, Nixon attacked "woolly heads who want to admit Red China to the U.N." But as the Vietnam War -- fought partly in fear of Chinese expansion -- started to go awry in the late 1960s and China began to feud with the Soviets, Nixon changed his mind on China.

In a 1967 Foreign Affairs article, Nixon wrote that America "simply cannot afford to leave China forever outside the family of nations, there to nurture its fantasies, cherish its hates and threaten its neighbors." During the 1968 campaign, Nixon told old Teddy White that his first act as president would be "to try to get in touch with Red China." In 1969, the United States eased travel and trade restrictions. Then in 1970, the Chinese government informed the Nixon White House that it would welcome a presidential envoy. In 1971, National Security Adviser Henry Kissinger made a secret visit to Peking, and an American pingpong team made a very public one. On July 15, 1971, Nixon surprised the world by announcing that he would visit China the next winter and would no longer veto China's admission to the United Nations.

In February 1972, Nixon made a 10-day visit to China that included a summit with Mao. (It turned out that both nations feared the Soviet Union). At the end of the visit, Nixon and the Chinese premier signed the Shanghai Communique, which recognized mainland China as the sole Chinese government (the status of Taiwan would be settled by future negotiations) and provided for vastly expanded economic ties. Nixon wrote in his memoirs that with the Shanghai agreement, "one era ended and another began."

It was famously said that only a fervent anti-Communist like Nixon, whom no one could accuse of weakness, could go to China. While a few conservatives like Barry Goldwater objected to "selling out Taiwan," the opening to China was the greatest achievement of the Nixon presidency. President Jimmy Carter gave formal diplomatic recognition to China in 1978 in exchange for the promise that reunification with Taiwan would be through "peaceful means."

Nixon's opening to China also played a big role in the American victory in the Cold War, because China's hostility forced the Soviet Union to spend one-fourth of its military budget guarding the Chinese border, thus hastening Russia's eventual bankruptcy and the rise of Mikhail Gorbachev, who ended the Soviet doctrine of world conquest.

Mao's successor, Deng Xiaoping, instituted a dramatic new economic policy in the late 1970s, based on manufacturing and massive foreign investment. He even proclaimed that in the "New China," it was "glorious to get rich." (Though economic reforms were to come first, human rights would eventually come at some unspecified time). The Deng policies were a shining success: three decades later, China led the world in manufacturing exports -- and the purchase of American debt bonds. Economic growth rates in China have averaged between 7 percent and 10 percent since 1990, meaning their overall wealth will double every decade. The World Bank estimates that the rate of "extreme poverty" (living on less than a dollar per day) in China fell from 81 percent in 1981 to just 16 percent in 2005.

U.S. business's vision of selling various consumer goods to a billion Chinese is about to happen. More than 10,000 factories in North America have been transferred to China in the last two decades. As University of Houston professor Richard Murray noted, "China is now the workshop of the world." China is also launching its own mission to the moon, surely a sign of superpower status, as was hosting the 2008 Olympics.

With its newfound wealth, China has built the world's largest army. Though China has had nuclear weapons since 1964, it lacks the air and sea power to attempt a military conquest of Taiwan. It will more likely continue to get richer and eventually buy the Taiwanese out. The Chinese are also very likely to continue to throw their weight around in Southeast Asia, their traditional sphere of influence. But China is highly unlikely to threaten other countries outside East Asia because the Chinese don't like to have much contact with cultures they consider inferior, and they usually like to let their wallets do the talking.

The New China certainly has problems: pollution, corruption and a seriously bad human rights record. Despite the nation's successful development of the last generation, roughly one-sixth of its people live on less than $20 per week. And even if China's GNP were to equal ours, the figure would be misleading: since China has four times as many people, its per-capita standard of living is much lower than the West. But its transformation from Third World poverty in 1972 to a modern superpower by 2000 is striking.

Now with a booming economy, advanced technology, a rapidly growing, educated middle class, a powerful army and a space program, China has regained its superpower status. Its reconciliation with the West in the 1970s was the turning point. Even allowing for a politician's normal boasting, Nixon's opening to China really did help reshape the next 40 years of world history.

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Note: I owe an apology to readers for my Jan. 15 article, where I wrote that Mitt Romney "won" the Iowa Caucuses. With only eight votes separating the top two, I should have added the obvious caveat: "subject to recount." In fact, the final vote canvas two weeks later awarded the victory to Rick Santorum by 34 votes.

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Patrick Reddy is a Democratic political consultant in California and the co-author of "California After Arnold." He is now working on a book on 21st century American politics.