The End of Isolation: Rapprochement, Globalisation, and Sino-American Trade, 1972-1978

Abstract

The End of Isolation: Rapprochement, Globalisation, and Sino-American Trade, 1972-1978, provides a social and political history of Sino-American trade relations during one of the most unusual periods of diplomacy in modern history. Beginning in February 1972, when President Nixon and Chairman Mao ended over two decades of economic and political isolation, and concluding with diplomatic normalization in December 1978, it examines how the new trade relationship was reestablished during a protracted period of diplomatic limbo. At the heart of this research lie two questions: why did American business people trade with the PRC in the 1970s? And what were the effects of their decisions—both economically and politically? In answering them, this study introduces previously overlooked historical actors to the narrative of rapprochement including American business people, American companies, American and Chinese trade organizations, and American and Chinese labourers. This thesis explores how the trade relationship unfolded in the dual contexts of diplomatic rapprochement and increasing economic globalisation. It demonstrates that the American ideational origins of the contemporary epithet for globalisation, “made in China,” developed in this decade through a confluence of economic and diplomatic priorities. This was a time when the PRC’s economy was developing its manufacturing capacity and beginning to increase its trade with foreign nations. I am interested in the motivations driving Americans’ decisions to buy and sell in this context. Profit is, of course, the most salient answer. But other factors also played an important role in the decision-making processes of both individuals and corporations particularly when profit was slow in coming. China, for so long unavailable, held an exotic appeal to many American business people. The exoticism not only piqued their interests but also became a key lens through which importers marketed Chinese goods to American customers. Part of the exotic appeal was the notion that trade with China would be lucrative. The allure of the China market has a long history, which envisioned a Chinese El Dorado that would bring economic prosperity to American business people. In looking at the effects of the unfolding trade relationship, this project makes three interrelated arguments. First, the relationship between trade and diplomacy was not linear. One of the major assumptions of the U.S. administrations of this period was that trade with China would assist the political negotiations. Yet even though America’s trade did not hinder the diplomatic process, rather than shaping the politics of rapprochement the reverse was more true. America’s trade with China was substantially influenced by political considerations. Second, it was Chinese politics in particular that shaped the trade relationship. By the mid-1970s trade was heavily imbalanced in America’s favour and diplomatic negotiations were stalling. China’s leaders, who saw trade ties as secondary to diplomatic negotiations, therefore slowed down and cancelled major purchases from the U.S. as a means of reprisal. They emphasised the importance of increasing their exports to the United States to redress the trade imbalance. Finally, I argue that the political aims for more balanced trade had such a formative effect because they coincided with the changing economic context in which American businesses operated. In this decade American importers increasingly began to look at China through the prism of a global search for outsourced production. The political desire to redress the trade imbalance coincided with an increasingly globalised economic environment. Motivated by economic priorities, American importers became inadvertent agents of diplomacy.