Forgotten Vanguard

Informal Diplomacy and the Rise of United States-China Trade, 1972–1980

Christian Talley

• Publisher: University of Notre Dame Press
• Year: 2018
• ISBN:
  9780268103002
• Topic: Política y relaciones internacionales
• Subtopic: Comercio y aranceles

The trading relationship between the United States and China, though now robust, was a recent and hardly inevitable development. Political animosity stemming from the Korean War and America's subsequent strategic embargo of China broke off economic and cultural ties. Following two decades of China's international isolation, as the United States sought to realign the geopolitical order in the 1970s, Washington began to engineer a restoration of its relationship with China. Diplomatic historians have carefully documented the formal and governmental intrigues of Nixon, Kissinger, Mao, and Zhou Enlai. As this book shows, a vigorous reconstruction of bilateral ties was unfolding simultaneously at the level of informal diplomacy, especially in the realm of US-China trade. Central to understanding the renewal of bilateral commerce is the National Council for United States-China Trade, an organization that, although nongovernmental, was established in 1973 with Washington's encouragement and oversight. The Council organized major American corporations not only to engage in commercial exchanges with China, but also to function as a diplomatic backchannel between Washington and Beijing before the two nations restored formal relations in 1979. Using the Council to historicize the entangling of the American and Chinese economies, Forgotten Vanguard not only reveals globalization's contingent path but also exposes the hidden importance of informal trade diplomacy in building the modern US-China relationship. This book will appeal to those with an interest in Cold War history, international relations, and the history of American diplomacy, with particular emphases on informal diplomacy and the modern history of the US-China economic relationship.

NOTES

Introduction

1. Christopher H. Phillips, interview with Charles Stuart Kennedy, May 12, 1993, p. 22, Foreign Affairs Oral History Collection, Association for Diplomatic Studies and Training, Library of Congress.

2. William H. Overholt, “China and Globalization,” testimony presented to the US-China Economic and Security Review Commission, May 19, 2005, p. 2, Rand Corporation, http://www.rand.org/content/dam/rand/pubs/testimonies/2005/RAND_CT244.pdf.

3. Ibid., 4.

4. Derek Watkins, “What China Has Been Building in the South China Sea,” The New York Times, October 27, 2015, http://www.nytimes.com/interactive/2015/07/30/world/asia/what-china-has-been-building-in-the-south-china-sea.html?_r=0.

5. Graham Allison, “The Thucydides Trap: Are the U.S. and China Headed for War?” The Atlantic, September 24, 2015, https://www.theatlantic.com/international/archive/2015/09/united-states-china-war-thucydides-trap/406756/.

6. Lisa Mahapatra, “China Manufacturing: 10 Things the Chinese Make More of Than Anyone Else in the World,” International Business Times, August 2, 2013; US Department of the Treasury/Federal Reserve Board, “Major Holders of Treasury Securities (in Billions of Dollars),” http://ticdata.treasury.gov/Publish/mfh.txt; and Office of the US Trade Representative, “The People’s Republic of China,” https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china.

7. Office of the US Trade Representative, “The People’s Republic of China.”

8. Ibid.

9. Bloomberg, “China Eclipses U.S. as Biggest Trading Nation,” February 10, 2013, http://www.bloomberg.com/news/articles/2013-02-09/china-passes-u-s-to-become-the-world-s-biggest-trading-nation.

10. Vittorio Hernandez, “IMF Forecasts China to Dethrone US as Biggest Economy with $17.6T GDP,” International Business Times, October 10, 2014.

11. Library of Congress, “US-China Trade [in books],” https://www.loc.gov/books/?q=us-china+trade.

12. The “Sino-Soviet split” refers to the acute deterioration of relations between the People’s Republic of China (PRC) and the USSR in the 1950s, culminating in the split in 1960. Mao Zedong had strongly disagreed with Nikita Khrushchev’s pursuit of détente with the West, leading to open antagonism of the Soviets in China’s state media and on Chinese diplomatic missions to Moscow. The Soviets withdrew all economic aid and technical advisors in 1959 and 1960, marking the beginning of the Sino-Soviet enmity that would last until the mid-1980s.

13. This motivation for American diplomacy is explored more substantially in chapter 1. On October 11, 1982, Richard Nixon recollected to The New York Times: “The key factor that brought us together ten years ago was our common concern with the Soviet threat, and our recognition that we had a better chance of containing that threat if we replaced hostility with cooperation between Peking and Washington. This overriding strategic concern dominated our dialogue, and our relationship, during the first decade.” See Richard M. Nixon, “America and China: The Next Ten Years,” The New York Times, October 11, 1982, A19.

14. Quoted in Margaret MacMillan, Nixon and Mao: The Week That Changed the World (New York: Random House, 2007), 304.

15. For an excellent discussion of the Harry S. Truman administration’s imposition of the embargo, see Shu Guang Zhang, Economic Cold War: America’s Embargo against China and the Sino-Soviet Alliance (Palo Alto, CA: Stanford University Press, 2001).

16. Elaine Sit, “Broken Promises: The Status of Expropriated Property in the People’s Republic of China,” Asian American Law Journal 3, no. 6 (1996): 112. These assets were valued at approximately $180 million. See Nancy Tucker, Patterns in the Dust: Chinese-American Relations and the Recognition Controversy, 1949–1950 (New York: Columbia University Press, 1983), 126.

17. For a comprehensive treatment of Anglo-US diplomacy in the creation of the COCOM commercial control system, see Ian Jackson, The Economic Cold War: America, Britain and East-West Trade, 1948–63 (New York: Palgrave, 2001).

18. Hale Boggs and Gerald R. Ford, “Impressions of the New China,” Joint Report to the US House of Representatives (Washington, DC: US Government Printing Office, 1972), 9. Emphasis mine.

19. Memorandum from Richard H. Solomon of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger), June 9, 1972, Foreign Relations of the United States, 1969–1976, Volume XVII, China, 1969–1972, Document 229.

20. Lee Branstetter and Nicholas Lardy, “China’s Embrace of Globalization,” NBER Working Paper No. 12373, July 2006, p. 4, http://www.nber.org/papers/w12373.pdf.

21. Perkins, interview with the author, September 26, 2015.

22. This is itself an oversimplification. The post-1978 moment was key for the embrace of reform and opening up, the devolution of the foreign trade regime, and the establishment of the first SEZs in 1980. But the economic reform initiatives lulled in the 1980s as China slowly devolved the state-owned enterprises. Following the Tiananmen Square massacre in 1989, after which institutional support for Deng’s market reforms waned, Deng’s Southern Tour in 1992 finally helped reenergize the economic reform initiative.

23. The Third Plenum of the Eleventh Party Congress meeting in December 1978 is often cited as the watershed moment that demarcates the beginning of significant interest in foreign trade. See the introduction of Zhang Peiji and Ralph W. Huenemann’s China’s Foreign Trade (Halifax: The Institute for Research on Public Policy, 1987), 1, or the preface to B...