By the end of the twentieth century, East Asia had become a centre of industrial and manufacturing production. Especially China began to establish commercial ties with the West in the 1970s and became the world’s leading heavy industrial producer by the year 2000. Its state-owned companies acquired contracts from Western firms to produce products cheaply and in bulk, for sale back to home markets in the United States and Europe. Moreover, the Chinese government established semicapitalist commercial zones around major port cities like Shanghai. These commercial zones were intended to encourage massive foreign investment on terms that left China a favourable balance of trade for its huge volume of cheap exports. Yet, in practice, they enjoyed only mixed success. Problems in farming and a looming energy crisis hampered prosperity and economic growth, but Hong Kong only managed to maintain its traditional economic and cultural ties with the rest of the world. However, in recent years, China has overcome most of these problems and radically upgraded its economic performance.