In Beijing's Economic Statecraft During the Cold War, Shu Guang Zhang focuses on China's economic statecraft from the establishment of the People's Republic in 1949 until the collapse of the Soviet Union in 1991. Zhang defines economic statecraft as a government's ability, intent, policy, and willingness to use economic tools to achieve its foreign policy goals. He argues that while many scholars have focused on economic statecraft during the Cold War, they tend to focus on asymmetric relations between the two major superpowers and smaller dependent states. Zhang's study, by contrast, is more unusual because it focuses on economic statecraft employed by a rising superpower. According to Zhang, his work seeks to achieve three major goals: to understand how China's economic statecraft evolved in conjunction with its quest for superpower status, to reconcile economic statecraft theories with China's experience throughout the Cold War, and to identify the dynamics that influenced the development of China's economic statecraft from 1949 until 1991.
Zhang argues that China first took advantage of economic statecraft in the immediate aftermath of the establishment of a communist regime to help lessen the damage of economic sanctions imposed by the United States and its allies. Mao Zedong turned to the Soviet Union and Eastern Europe for economic support and technical assistance. China's reliance on the Soviets began to increase during the Korean War, as Mao's decision to intervene in the Korean conflict led to the imposition of United Nations sanctions. With no experience in managing a national economy, the Chinese leadership consolidated their control over foreign trade and relied heavily on loans and advice from the Soviet Union. Mao recognized early on that overreliance on the Soviet Union carried with it the risk of economic dependency, but he had no choice but to accept an asymmetric relationship for the time being.
After Stalin's death, Beijing pressed for increased development assistance from the Soviet Union. Khrushchev, Stalin's successor, initially adopted a friendly posture with Beijing, but soon failed to follow through on some of his commitments. The Soviets were disturbed by China's Great Leap Forward campaign. At the same time, Mao became increasingly convinced that Khrushchev was trying to exert control over Beijing, including through an arms control agreement with the United States. By the end of the 1950s, relations between the Chinese and the Soviets were in a state of disrepair. Hostilities on the Sino-Soviet border in 1969 offered another major blow to the already deteriorating bilateral relationship.
To expand its influence abroad, China adopted economic assistance programs for developing nations in Asia and Africa despite its own weak economy. This new economic statecraft began in earnest after the deterioration of relations between Beijing and Moscow, as the Chinese regime sought new allies. China was seeking to adopt a more internationalist posture on the world stage, especially with respect to bolstering the independence of third world nations. Beijing's efforts were generally well received: 15 Asian and African nations established diplomatic relations with Mao's regime between 1955 and 1960.
During the 1960s and 1970s, China and the Soviet Union competed for influence in North Vietnam, Albania, Mongolia, and North Korea. Competition between the two nations in North Vietnam was heightened after the American invasion. To counter Soviet efforts to gain influence in Hanoi, China became involved in providing supplies and technology to reinforce North Vietnam's war effort. At the same time, Beijing sought to normalize relations with Japan. Some politicians and businessmen were receptive to China's push for further engagement, but the Japanese government felt compelled not to establish diplomatic relations until Richard Nixon visited China in 1972.
Zhang argues that in Mao's final years in office, he began to see the benefits of ending China's relative diplomatic isolationism, leading to the pursuit of a new relationship with both the United States and the Soviet Union. A rapprochement with the United States began in the early 1970s, but the process was rather slow because China was not willing to establish full diplomatic relations until the United States cut its formal ties with Taiwan, which the Carter administration did in 1979. Furthermore, China's foreign aid and economic statecraft continued to have its desired effect, as 67 nations voted in 1971 to expel Taiwan from the United Nations and allow Beijing to join instead. Chinese relations with the Soviets did not improve to a significant extent until 1989, just two years before the end of the Cold War.
Under Deng Xiaoping, China's foreign policy experienced further evolution. Deng chose to open China's economy, hoping to stimulate trade, investment, and the development of technology. China's economic statecraft was refocused, placing a greater emphasis on fostering domestic economic development. Relations with the West continued to improve throughout the 1980s, as economic ties expanded drastically. While the relationship suffered a setback after China's repression of student protestors in Tiananmen Square, Western economic sanctions were only in place for a short period of time. Many nations simply could no longer afford to reduce economic ties with China over the long-term.
Zhang contends that by the end of the Cold War the Chinese leadership understood a crucial lesson: China's economic power could and should be used as an important strategic asset. He also argues that China's economic statecraft was heavily influenced by individual leaders: Mao chose to pursue greater international influence and prestige, while Deng focused on domestic economic development. China clearly continues to pursue Deng's vision of economic statecraft up until the present, with economic growth being prioritized above all else.
Zhang's work is very well-written and offers valuable insight into China's past and present behavior. Many of China's present tendencies, including its unwavering support for national sovereignty, can be explained by some of its early experiences in dealing with dependency and the Soviet Union. One important element missing from this book is a comprehensive appraisal of the success or failure of China's Cold War economic statecraft. Beyond that, this book will be of great value to scholars of contemporary Chinese political and economic development and students of the Cold War.
