CHINFISI · China's Economic Relations with Western Europe during Cold War (1952-66)

China's Economic Relations with Western Europe during Cold War (1952-66)

Summary description of the project objectives The focus of the present project is on East-West economic interactions in the early decades Cold War. The main aim is dual: 1) to assess the role of Mao’s China, by testing the widely acknowledged thesis that China was secluded from the Free World and thoroughly hostile to any interplay with capitalism. 2) to study the attitude to China in Western European countries at a time when tight alliance with the United States greatly constrained the actions of their governments. From an international history perspective, it is crucial to know when did the economic relations between PRC and non-Communist Europe start, how relevant were they, and how did they interact with politics. Since both US and Europe had a great link with China before WWII, there is reason to think that a strong economic interest might resume. Was it really Nixon’s trip to Shanghai in 1972 that changed Western European views of China? Or had Europe looked favourably at China some time before the US? From the perspective of a China scholar, it is interesting to establish whether Mao’s China harboured elements of continuity with the country’s pre-WWII and post-1978 integration into the world economy. How much did China rely on foreign trade? Did China have an interest for capitalist, especially Western European, goods? Which channels did information flow? What role for economic and financial operators? From an economic history perspective, are Deng Xiaoping’s reforms to be confirmed as groundbreaking as it has been claimed? Did foreign contacts in Deng’s times emerge from a completely new environment? Interplay with capitalism? Or was PRC Work performed since the beginning of the project aybe more integrated into the “free” trading system The fellow has carefully reviewed the existing literature, highlighting that academic scholarship has in principle recognized that the study of an economic and technological dimension is relevant to the understanding of the Cold War, though such issues have not yet received the full amount of attention. Historical analysis has privileged the point of view of national political leaders, while it is indeed by studying the role of non-state actors (company CEOs and managers, traders, bankers, bureaucrats, who were directly involved in day-to-day operations) and their relationship with governmental leaders, that scholars can obtain revealing insights of how trade across the Blocs influenced post WWII European development, the political changes which led Socialist countries to Capitalist transition, and to economic globalization. Consequently, the researcher has carried out a micro-level analysis on economic practices, largely relying on business correspondence, intelligence reports, and memories pertaining to Britain, France, Germany, Italy and Hong Kong’s economic relations with Red China. Furthermore, the researcher has thoroughly assessed China’s system of foreign trade during Mao years both at a domestic and international level by studying a number of trade-related documents preserved in the Chinese archives. The fellow has accompanied research actions to a series of dissemination activities and networking, with the objective to maximize comparison and discussion. In such activities, the researcher has also involved a substantial number of contacts outside the academic environment. Main results achieved so far The analysis of China’s foreign trade under Mao confirms some important patterns of the country’s pre-WWII attitude, when Western European trading companies and industries played a crucial role (i.e. Germany was China’s first trading partner before the war). Industrialization being its main aim in 1950’s – 1960’s, Red China was ever more in need of Western European capital goods and technology. The research has proved that, although most of the economy was nationalised and most foreign companies had been expelled, Western European business people were able to carve out a relevant role for themselves and to strengthen the position of their countries of origin. This happened much before Nixon’s green light of 1972. Such fruitful business operations were facilitated by the fact that many Chinese cadres who handled foreign trade operations at high and mid levels, had been active in the Guomindang era and had operational knowledge of the capitalist system, as well as useful contacts abroad. Moreover, Mao’s China could count on a well established transnational network operated by overseas Chinese based in Hong Kong, Malaysia and Singapore, which provided hard currency through remittances and acted as a base to link up with international economy. Especially Hong Kong and Singapore were useful providers of financial services. Expected final results and their potential impact and use (including the socio-economic impact and the wider societal implications of the project so far). Although further research is necessary, the idea of a complete isolation of the People’s Republic of China during Cold War appears more and more questionable. Not only did China’s interest for European capital goods contribute to push post-WWII reconstruction in many Western economies. Throughout the 1950’s and 1960’s the favourable attitude to trade shown by relevant economic actors put Western European countries in advantageous position respect to the United States. Due to the tigh relationship between the political and the economic actors, such early perceptions of China as an emerging market were crucial for the development of fruitful long term bilateral relations between China and Western European countries. Although many factors conflate to depict Mao’s China as a country exclusively locked into itself, there is evidence that China started rather early to value cooperation with “first world countries”, and had effective opportunities to study what the capitalist world could offer as an alternative to the tightly constraining alliance with the USSR and the Eastern Bloc. Most importantly, the role of the overseas Chinese would become ever more relevant as soon as Deng Xiaoping launched the reforms in late 1970’s. Hong Kong, that was a pivotal source of hard currency during early Cold War, continued to play a relevant role as a financial hub until China’s accession to WTO. The entrepote trade and the services still represent a crucial issue in current Hong Kong - Mainland relations. The findings bear a great relevance for the understanding of the long-term paths of Europe-China relations and of China’s ascent to a world-leading position, both for the academic world and for policy makers. Since many of the materials have been collected with the help of the economic actors directly involved, the outcomes are likely to influence the future attitude of Western European companies interested in China.

Data: CORDIS, © European Union