Forgotten Vanguard: Informal Diplomacy and the Rise of United States-China Trade, 1972-1980

by Christian Talley

Overview

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.

Product Details

ISBN-13:	9780268103002
Publisher:	University of Notre Dame Press
Publication date:	03/30/2018
Sold by:	Barnes & Noble
Format:	eBook
Pages:	282
File size:	1 MB

About the Author

Christian Talley is a writer and independent scholar. He received a graduate degree from the University of Oxford.

Read an Excerpt

Following President Nixon’s historic opening to Beijing in February of 1972, the United States engaged in an ongoing rapprochement—a rebuilding of relations—with China. Surveying the international landscape, America’s leaders found clear strategic benefits in such rapprochement. China had taken a hard stance against the Soviet Union during the profound deterioration of Sino-Soviet relations in the 1950s, culminating in the Sino-Soviet split of 1960. Nixon and his National Security Advisor, Henry Kissinger, thought that opening to the Chinese could facilitate the short-term benefit of a withdrawal from the Vietnam War as well as the long-term benefit of gaining the Chinese as a counterweight to the Soviets in the Cold War struggle.

Trade, in this drama, initially played a marginal role in the minds of top US policymakers. In 1972, Henry Kissinger concluded, “the maximum amount of bilateral trade between us”— the United States and China—“even if we make great efforts, is infinitesimal in terms of our total economy.” Kissinger had good reason to be skeptical of trade. China in 1972, then emerging from years of devastation under the Great Leap Forward and in an ongoing Cultural Revolution, had an average per capita income of around $100 USD. Its economy remained mostly rural-agrarian. Mao Zedong opposed foreign trade, foreign investment, and sought autarky for ideological and historical reasons. China’s upheavals in the mid-1970s seemed to make it a uniquely unstable and impenetrable market for American business.

Despite the incredibly long odds of bilateral trade, skepticism did not translate into fatalism. Trade remained an interesting possibility as a method of promoting ties between the United States and China. An important institutional obstacle that Nixon first addressed was America’s ongoing embargo of China’s economy. After China had sent troops into North Korea to repel the US Army in the Korean War, President Truman had broken all relations and had imposed a strict embargo against trading with China, in December of 1950. For two decades, the United States and China exchanged only nominal amounts of goods, and in some years, actually had no bilateral trade. As Nixon opened to China, he began to repair the legal frameworks of trade that had been severed since 1950. Nixon relaxed some of Truman’s restrictions by ending the travel ban against visiting the mainland and by mostly abolishing the embargo on US-China trade, excepting certain strategic items.

Though Nixon considered trade a minor economic factor, it could still be of diplomatic significance in cultivating new ties with the Chinese. Perhaps trade, even if lacking in major economic importance, could still be of political and diplomatic importance in increasing bilateral connections. A House of Representatives mission to China in mid-1972 endorsed this conclusion. House Majority Leader Hale Boggs and then-House Minority Leader Gerald Ford wrote in their post-trip debriefing that “though diplomatic ties with China may be a condition precedent to any dramatic increase in the range and volume of goods traded, this is not to say that some significant trade cannot occur before that event. Obviously, trade itself can play an important part in bringing about diplomatic ties.” As the rapprochement went on, the government became progressively more interested in bilateral trade, as well as in ways to circumvent the grave challenges to a Sino-American economic relationship.

As it became clear that traditional methods of stimulating bilateral trade—treaties, foreign investment, economic liberalization—were of little immediate help in the atypical Sino-US relationship, the US government turned to non-traditional proposals. One such idea was a nominally private commercial trading organization. To this end, the Departments of State and Commerce, with the direct approval of Nixon and Kissinger, began to build a private, non-governmental organization, the National Council, to focus on promoting US-China trade and on spreading basic information about the Chinese economy. By May of 1973, the executive branch had handed off its creation to the private sector, nominating Westinghouse Electric’s chairman, Donald Burnham, as the first chairman of the National Council. In a relatively rapid ascendancy, the Council grew to include over two hundred major American corporations within the year.

The Council, however, embraced important roles outside of bilateral trade advocacy. By design, for a short period in the 1970s, it also acted as a diplomatic ‘go-between’ group for Washington and Beijing. Under the veil of its private, non-governmental status, the US government used the Council to promote official American diplomatic positions to the Chinese. At a time when the Chinese, due to intense dissatisfaction over Washington’s continued recognition of Chiang Kai-shek’s Nationalist government in Taiwan, occasionally refused to meet with American diplomats, the Council, as an ostensibly non-partisan organization, could take up backchannel negotiations where formal talks had broken off. Such backchannel diplomacy was especially useful in the era after Nixon’s opening in 1972 but before the formal resumption of Sino-American diplomatic relations in January of 1979. In practice, the Council proved effective in such diplomacy, as Kissinger himself recognized in an enthusiastic letter to its Board of Directors in 1973. At a time when the United States and China had shown friendly overtures but had not yet re-established their formal ties, the Council’s “alternative forms of representation” helped mitigate the difficulties of formal diplomacy.

The Council’s importance in actually facilitating early bilateral trade transactions also cannot be understated. Indeed, its ‘go-between’ functions applied with equal force in rekindling Sino-US economic exchanges, due in part to the complexities of trading with Maoist China. Until 1978, China’s foreign trade was monopolized under a bureaucracy of governmentally-run Foreign Trade Corporations (FTCs). Buying and selling with the FTCs was a complex and exclusive process, creating the need for the Council’s sophisticated ‘middleman’ operations. By directly coordinating the early contacts of American businesses and China’s FTCs, the Council facilitated some of the first business transactions after Nixon’s 1972 opening.

The Council’s litany of other functions cemented its importance to early bilateral trade. It staffed an office at the Canton Trade Fair in Guangzhou (then China’s major outlet for foreign trade), providing key services to American traders in China. It published the industry-standard magazine on the Chinese economy, the U.S. China Business Review, that was well-received not only in American business circles but was also sought by Chinese diplomats for its accuracy and comprehensiveness. The Council held conferences and established an Academic Advisory Board that spread “basic information” about the Chinese economy at a time when such information was at a premium. While China’s trade remained deeply enigmatic—not only because of Mao’s policies, but also because of the two-decade cut-off in cultural and economic contacts—the Council provided essential insights into Sino-American trade.

(excerpted from introduction)

Table of Contents

Acknowledgements

Introduction: The Forgotten Importance of the National Council

1. Disorder Under Heaven: The Deep Uncertainty of Sino-American Trade

2. Backchannel to China: The Non-Traditional Diplomacy of the National Council

3. Informal Trade Diplomacy in Détente and Rapprochement: A Comparative Analysis

4. The National Council, 1974-1977: Capability and Contingency

5. Deng, the Council, and the Normalization Breakthrough: 1977-1980

Conclusion: A Changed China, a Changed National Council

Afterword: Complicating Models of Civil Society Interaction

Bibliography

Appendix A: An Interview with Professor Dwight Perkins

Appendix B: An Interview with Gene Theroux

Appendix C: An Interview with Nick Ludlow

Editorial Reviews

"This highly-readable volume exposes the drama of the development of America’s business involvement with the People's Republic of China. It is essential reading for anyone interested in the many realities of how today’s 'mutually beneficial' US-China economic symbiosis emerged and paved the way for the interdependent relationship it is today." —Nick Ludlow, founding editor, The China Business Review

"The relationship between the United States and China is at the heart of the international order of the twenty-first century, and trade between the two giants has recently become one of the most contentious issues of contemporary American politics. Christian Talley has written a brilliant, engaging, and even surprising history of the early years of these economic ties, emphasizing the contingent nature of this relationship and the ways American business, through the National Council for United States-China Trade, helped serve larger national security objectives. His book could not be a more important and timely account for both policymakers and scholars alike in understanding why and how we have come to our present situation, and the difficult choices and dilemmas we face in the future." —Thomas Schwartz, Vanderbilt University

"Presidents Nixon and Carter justifiably get credit for normalizing American relations with China, but there were several organizations that played key supporting roles. Christian Talley has done us an important service in this volume assessing the role of the National Council for United States–China Trade in the development of Sino-American official relations in the decade after Nixon's 1972 visit to China. The Council and its leaders were involved in sometimes dramatic developments along with outreach and consensus building among the business community, in Congress, and with specialists and the media about the significance of economic ties between the two countries." —Robert Sutter, George Washington University

“China is the number one trading partner of the United States. Today, Sino-US trade has rocketed to more than $580 billion annually. The swift development of this relationship is without precedent in the history of international trade. A pioneer in this promising partnership was an organization known today as the US-China Business Council. The contribution of the Council in fostering trade relations with China is the story told by Christian Talley in his important and entertaining book Forgotten Vanguard.” Gene Theroux, senior counsel emeritus, Baker & McKenzie LLP

“Talley was the first researcher to analyze the records of the NCUSCT and to place them within the larger context of U.S.-China relations. . . . a very impressive contribution to understanding the historical background to what has become on of the most important international issues of our time.” —H-Diplo Roundtable Review

From the Publisher

China is the number one trading partner of the United States. Today, Sino-US trade has rocketed to more than $580 billion annually. The swift development of this relationship is without precedent in the history of international trade. A pioneer in this promising partnership was an organization known today as the US-China Business Council. The contribution of the Council in fostering trade relations with China is the story told by Christian Talley in his important and entertaining book Forgotten Vanguard.

Gene Theroux

"This highly-readable volume exposes the drama of the development of America’s business involvement with the People's Republic of China. It is essential reading for anyone interested in the many realities of how today’s 'mutually beneficial' US-China economic symbiosis emerged and paved the way for the interdependent relationship it is today."

Nick Ludlow

Talley was the first researcher to analyze the records of the NCUSCT and to place them within the larger context of U.S.-China relations. . . . a very impressive contribution to understanding the historical background to what has become on of the most important international issues of our time.

H-Diplo Roundtable Review

"Presidents Nixon and Carter justifiably get credit for normalizing American relations with China, but there were several organizations that played key supporting roles. Christian Talley has done us an important service in this volume assessing the role of the National Council for U.S.–China Trade in the development of Sino-American official relations in the decade after Nixon's 1972 visit to China. The Council and its leaders were involved in sometimes dramatic developments along with outreach and consensus building among the business community, in Congress, and with specialists and the media about the significance of economic ties between the two countries."

Robert Sutter

"The relationship between the United States and China is at the heart of the international order of the twenty-first century, and trade between the two giants has recently become one of the most contentious issues of contemporary American politics. Christian Talley has written a brilliant, engaging, and even surprising history of the early years of these economic ties, emphasizing the contingent nature of this relationship and the ways American business, through the National Council for US-China Trade, helped serve larger national security objectives. His book could not be a more important and timely account for both policymakers and scholars alike in understanding why and how we have come to our present situation, and the difficult choices and dilemmas we face in the future."

Thomas Schwartz