Article 37 of the Common Program
Text
Article 37 of the Common Program

Commerce: All legitimate public and private trade shall be protected. Control shall be exercised over foreign trade and the policy of protecting trade shall be adopted.
Freedom of domestic trade shall be established under a unified economic state plan, but commercial speculation disturbing the market shall be strictly prohibited.
State-owned trading organizations shall assume the responsibility of adjusting supply and demand, stabilizing commodity prices and assisting the people's co-operatives.
The people's government shall adopt the measures necessary to encourage the people in saving, to facilitate remittances from overseas Chinese, and to channel into industry and other productive enterprises, all socially idle capital and commercial capital which is not beneficial to the national welfare and/or to the people's livelihood.



Timeline Foreign Trade Relations
Region 1: Region 1: SU, Korea, Bhutan, Laos,
Burma, Nepal, India, Pakistan,
Vietnam and Mongolia

Soviet Union
3-10-1949 Soviet Union recognizes PCR
14-2-1950 Sino-Soviet Trade Agreement

Burma
16-12-1949 Burma recognizes PRC
22-4-1954 Sino-Burmese Three Year Trade Agreement
North Korea
4-10-1949 North Korea recognize PRC
16-11-1953 Zhou Enlai and Kim Il sung sign secret
technological cooperation pact

India
29-12-1949 India recognizes PRC
2-1-1951 Sino-Indian trade agreement

Mongolia
6-10-1949 Mongolia recognizes PRC
4-10-1952 10 year Sino-Mongolian Agreement on Economic
and Cultural Cooperation

Pakistan
5-1-1950 Pakistan recognizes PRC
14-3-1953 Sino-Pakistani Cotton and Coal Agreement

Vietnam
15-1-1950 DR Vietnam formally recognizes PRC
19-1-1950 Sino Vietnam trade agreement on military supplies
Region 2: Indonesia, Japan Philippines, Thailand,
Afghanistan, Ceylon and Cambodia

Japan
May 1952 Japanese delegation visits China
1-6-1952 Sino-Japanese private trade agreement is signed

Ceylon
7-1-1950 Ceylon recognizes PRC
4-10-1952 Sino-Ceylonese General Trade Agreement

Indonesia
13-4-1950 Indonesia recognizes PRC
30-11-1953 Sino-Indonesian Trade Agreement
Region 3: GDR, Poland, Czechoslovakia, Romania,
Bulgaria, Yugoslavia, Albania and Hungary

Albania
20-11-1949 Albania recognizes PRC
3-12-1954 Sino-Albanian Agreement Concerning a
Long-Term Chinese Credit to Albania

GDR
27-10-1949 GDR recognizes PRC
10-10-1950 Sino-GDR Trade Agreement for 1951
Hungaria
4-10-1949 Hungary recognizes PCR
22-1-1951 Sino-Hungarian Trade Agreement for 1951
Bulgaria
3-10-1949 Bulgaria recognizes PRC
21-7-1952 Sino-Bulgarian Trade Agreement for
Exchange of Goods and Payments in 1952

Rumania
3-10-1949 Rumania recognizes PRC
19-1-1953 Sino-Rumanian Goods Exchange
and Payment Agreement for 1953

Czechoslovakia
5-10-1949 Czechoslovakia recognizes PRC
14-6-1950 Sino-Czechoslovak Trade Agreement for 1950
Poland
5-10-1949 Poland recognizes PRC
1-3-1950 Sino-Polish Barter Agreement
Region 4: Scandinavia, the Netherlands,
UK, Switzerland, Liechtenstein, FRG,
Israel, France and US

UK
6-1-1950 UK recognizes PRC
14-4-1952 Sino-British Trade Agreement

FRG
1972 FRG recognizes PRC
25-6-1952 Sino-West German Trade Agreement

Finland
13-1-1950 Finland recognizes PRC
21-9-1952 Sino-Soviet-Finnish Agreement on Supply of
Commodities in 1952

Belgium
1971 Belgium recognizes PRC

Switzerland
17-1-1950 Switzerland recognizes PRC
14-9-1950 Sino-Swiss Trade Agreement
The Netherlands
27-3-1950 The Netherlands recognizes PRC
14-4-1952 Sino-Dutch Trade Agreement
Italy
1970 Italy recognizes PRC

France
1964 France recognizes PRC
14-4-1952 Sino-French Trade Agreement

Region 5: Latin America, Arabia and Africa
Egypt
22-8-1954 Sino-Egyptian trade agreement


Chile
23-10-1952 Sino-Chilean Trade Agreement

The Common Program is formulated in such a way that maximum flexibility regarding the development of the economy is possible. Articles 54-56 stipulate that the PRC can develop friendship with non-Soviet and even imperialist nations. These articles contradict the statement of Mao Zedong that China will not take the middle road, but will ‘lean to one side’. However, the economic, ideological and political reality forces the Chinese leaders to take a more pragmatic view. The political leaders of the CCP have to deviate from traditional Marxist theory. Socialism can only be accomplished by a revolution. Mao Zedong states: "the proportions of industry and agriculture in the entire national economy of China were, modern industry about 10 per cent, and agriculture and handicrafts about 90 per cent. This was the result of imperialist and feudal oppression; this was the economic expression of the semi-colonial and semi-feudal character of the society of old China; and this is our basic point of departure for all questions during the period of the Chinese revolution and for a fairly long period after victory. This gives rise to a series of problems regarding our Party's strategy, tactics and policy…The two basic policies of the state in the economic struggle will be regulation of capital at home and control of foreign trade."
March 5, 1949 Mao Zedong Report to the 2nd plenary session of the 7th CC of the CCP
In other words, the proletariat class is too small and is not capable of conducting a socialist revolution at this moment.
The economic situation compels the new regime to rely on essential materials from Western countries, because the SU cannot supply them.. On February 16, 1949, the CCP issues an instruction on foreign trade policy: "The basic guideline of our foreign trade is that we should export to and import from the Soviet Union and other new democratic countries so long as they need what we can offer or they can offer what we need. Only in the situation that the Soviet Union and other new democratic countries are not in a position to buy from us or sell to us will we do some business with capitalist countries."
The CCP Central Committee, “Instructions on Problems Concerning Foreign Trade Policy,” February 16, 1949 Cited in Chen Jian (1994). China's Road to the Korean War: The Making of the Sino-American Confrontation. Pages 12-13
Therefore, Article 57 of the Common Program states: the People's Republic of China may restore and develop commercial relations with foreign governments and peoples on the basis of equality and mutual benefit.
Trade shares of People's Republic of China (%)
Source: Sun Norman (1968). Trade between mainland china and japan under the 'l-t'agreements. Page 59
Some concrete steps are taken. For the time being, private management of the import and export trade is allowed. Foreign firms are allowed to set up offices in China. "To develop a wider range of exportable materials, local governments were directed by the Central Committee to pay attention to developing exportable staple crops and products such as cotton, soy beans, salt, peanuts, tobacco, silk, fur, exportable handicrafts and manufactured goods. Loans and other incentives were to be used to encourage the increased production of exportable goods
O'Brien Neil L. (2004). An American editor in early revolutionary China. John William Powell and the China Weekly/Monthly. Page 108
The GAC of the CPG promulgated the "Interim Rules for the Administration of Foreign Trade" on December 8, 1950, and the Trade Ministry of the Central People's Government (later renamed the Ministry of Foreign Trade) applied the licensing system to all import and export commodities from May 1951.
Right from the start, the new regime decides "... that imports of industrial-related equipment and technology were top priority and that traditional methods, within a new institutional framework, would be sufficient to generate adequate agricultural growth to meet industrial targets. Essentially, the Chinese needed to export enough foodstuff, textiles and light industrial goods to pay for necessary material, equipment and technology imports."
Mitcham Chad J. (2005). China’s Economic Relations with the West and Japan, 1949–79. Grain, trade and diplomacy. Page 4
Import duties were moderate or nonexisting for industrial equipment, raw materials, and other products essential for the development of heavy industry. Protective tariffs are levied on the imports of consumer goods. Production for exports always presides over production for domestic consumption. However, the government has to import Western grain because the domestic production is too low. Wheat is less expensive and contains higher protein than rice. Therefore, rice is exported and wheat is imported. Mao Zedong wants to become less dependent on these imports and suggests distributing grain rationally and to increase domestic production. The Central government accounts for this grain shortage by blaming black-market sales and hoarding.
On December 22, 1949, while Mao Zedong was in Moscow, he sent a telegram to the CC of the CCP, in which he stressed the necessity of trading with other countries (Germany, GB and the US) besides with the SU.
22-12-1949 Telegram Mao Zedong on international trade


After the thirty-year Sino-Soviet treaty was signed on February 14, 1950, The Coordinating Committee of the Consultative Group (COCOM)
a.k.a. ‘the Paris Group, created in 1949 with the following countries: Belgium, Canada (1950), Denmark (1950), France, West Germany (1950), Greece (1953), Italy, Japan (1953), Luxembourg, Netherlands, Norway (1950), Portugal (1952), Turkey (1953), United Kingdom, and United States. Its purpose is to inhibit the transfer of military or dual use technologies to the SU and Eastern Bloc countries. The counterpart is the Council for Mutual Economic Assistance or Comecon (January 1949). The members included SU, Bulgaria, Czechoslovakia, Hungary, Poland, Romania, Albania and, East Germany. Although the PRC wanted to become a member, Stalin refused. Libbey (2010) remarks "The explanations for Comecon’s birth are only vaguely related to the notion of a common market. First, and most obviously, the group gave substance and organization to the Soviet Union’s economic war with Yugoslavia. This war had a side benefit of providing the institutional means of excluding Yugoslavia’s disease of independence from Eastern Europe’s economic development." Libbey James K. (2010). CoCom, Comecon, and the Economic Cold War. Page 141
"The lists were divided into four categories or classes. Class 1 included all military goods such as guns, ammunition or tanks, or machinery for their manufacture, such as special machine tools and extrusion presses, electronic equipment, vacuum tube machinery, blast furnaces, oil drilling equipment, tractors, trucks, merchant ships, and all strategic chemicals such as benzine, sodium, mercury, all nitrates and nitric acid, tin, zinc, lead and copper. Class 1A included military and semi-military items such as radio equipment, ultra-violet equipment, broad-band communication equipment and large pressure vessels. Class 2 contained products of industrial potential to the East such as road-building equipment, excavators, engines, steel, cast-iron and plate glass. In Class 3 were items regarded as important in maintaining the basic economy such as office machinery, plumbing equipment, needles and matches. Class 4 was the catch-all category embracing all items not elsewhere listed." Frank Cain (1995). The US‐led trade Embargo on China: The origins of CHINCOM, 1947–52. Page 34
decided in March 1950 to apply the same trade controls on China as on the SU and Eastern Bloc. After China participated in the Korea War, the China Committee (CHICOM) was established with the aim to restrict international trade with China, Hong Kong, and Macau. China, like all other communist countries (except Yugoslavia) lost its US most-favored nation status in 1951.
Most-favored-nation status guarantees a nondiscriminatory US tariff rate to the foreign exporter.
The CHICOM embargo list was about two times longer than the COCOM list. Neutral countries such as Sweden and Switzerland, as well India, Pakistan, Burma, Indonesia, Afghanistan and the Arabian League were not members of the embargo club. The Chicom embargo seriously affects HK trade to PCR in volume and percentage. However, in the beginning of 1953 West European countries are increasing their export to the PCR
A large part of the increased imports consisted of steel and iron products and machinery from France and FRG. Synthetic textile,fibers from Italy. The UK exported more industrial and chemical fertilizers and also wool and textile machinery. November 1949: 86, November 1951: 270, January 1952: 285, March 1954: 265, August 1954: 170 items were on the COCOM list. See table
The founding of the Sino-Polish Joint shipping company in Tianjin in 1951 was an attempt to undermine the embargo. See Article 36


The new government starts immediately by monopolizing the external trade, and all private elements are disposed of. Former middlemen between the foreign merchants and the Chinese traders could only keep working if they worked on behalf of the state trading companies. On March 10, 1950, the government established 6 state foreign trade corporations: Bristles Corporation, the Native Produce Export Corporation, the Oils and Fats Corporation, the Import Corporation, the Tea Corporation, and the Minerals Corporation. Soon 5 more corporations were established China Petroleum Corporation, the China Egg Products Corporation, the China Silk Corporation, the China Skin and Fur Corporation, and the China Industrial Material and Equipment Corporation. In 1954 the list expanded with 4 corporations: The China National Foodstuffs Export Corporation, the China National Cereals and Oils Export Corporation, the China Silk Export Corporation, and the China Miscellaneous Articles Export Corporation. All of these corporations have offices in important cities throughout the mainland. They are separate legal entities; each corporation is a separate accounting unit and operate as a separate company. the corporation is not a consuming or producing unit-it is a middleman in the planned economy. The Ministry of Foreign Trade supervises and controls the corporations.
Wang Kenneth (1973). Foreign Trade Policy and Apparatus of the People’s Republic of China. Pages 196-197
In 1950, the government controlled 70% of imports and 54% of exports. In 1953, the numbers had increased to 92%. In the early 50’s, the intention and the organization of foreign trade of the government are distinctly socialist. ownership has still a dual character, however, also going in the direction of collective ownership. On March 10, 1950, the GAC promulgated Decisions on the Procedures Governing the Unification of State-Operated Trade in the Nation
see document march 10, 1950
, and it describes the objectives of the government. "unifying trade throughout the country, guiding the domestic market, adjusting the supply and demand of commodities at both national and local levels, and promoting the rapid recovery and development of productive enterprises. Thus, economic growth and state control were seen as closely intertwined."
Solinger Dorothy J. (1980). Socialist Goals and Capitalist Tendencies in Chinese Commerce, 1949-1952. Page 200
In other words, trade should leave the path of free trade and to become unified and support the socialist economy.
In August 1952, the Ministry of Trade was divided into 2 ministries, one for internal and one for external trade. The foreign trade ministry has several corporations under control, like The China national Animal By-Products Imports and Export Corporation, like The China national Arts and Craft Imports and Export Corporation, and The China National Cereals, Oils Imports and Export Corporation.
"The China Publication Centre, which is not a corporation, is responsible for the export of books and periodicals. Officially, they are not considered a trading corporation and therefore, not directly under the Ministry of External Trade." Hung Chiu-ling (1968). An analysis of Mainland China's export to Hong Kong since 1950. Page 5-10
Skřivan (2017) remarks "This system, however, also demonstrated a clear disadvantage, which became evident particularly in trade relations with democratic countries and to a smaller extent also with communist countries, and that was weak direct ties between the purchasing and selling parties. Companies from Western countries were in effect precluded from direct contact with Chinese producers (or recipients), which along with other factors considerably complicated trade with the PRC. Due to this system the flow of information in trade between the PRC and other communist countries was more complicated and slower.5"
Skřivan Aleš (2017). On the Character of the Foreign Trade of the People’s Republic of China in the Period 1949–1969. Page 167
The Committee for the Promotion of International Trade (PIT) is established in 1952 as an independent organ to establish contacts with foreign firms (of countries with no official ties with the PCR), to organize exhibitions of Chinese products in foreign countries, especially in Hong Kong, and inviting non-governmental trade delegations to China. The PIT is allowed to sign contracts and agreements, it is a non-governmental economic and trade organization composed of representatives and experts from the P.R.C.'s economic and trade circles. (Its board of directors includes officials from the MOFERT, the Bank of China, and other relevant departments.)
In 1952, the China Committee for Promotion of International Trade compiles "New Chinas Economic Achievements 1949-1952."
One of the first success is the signing on June 1, 1952 "...an initial private trade agreement with Japan which provided for £30 million in goods to be bartered before the end of the year. Although only about 5 per cent of this amount was traded because the Japanese refused to sell the Chinese embargoed items such as special steel, tin, locomotives, cranes and trucks, it enabled Beijing to obtain some essential items such as chemical fertilizer in exchange for coal. The agreement sparked greater Japanese interest in the Chinese market, placing Tokyo under pressure to re-examine its China trade Restrictions."
Mitcham (2005). China’s Economic Relations with the West and Japan, 1949–79. Page 6
See also Article 56



The new government faced an "….ongoing fight against coastal illicit trade, in particular, Kong struck a decidedly more cautious tone that betrayed concern: ‘Although the customs’ anti-smuggling work has achieved much success nationwide, the smuggling situation remains serious.’ 1 Even in the face of ever-tightening state strictures, commodities of all kinds continued flowing freely along the Chinese littoral and filtering into the heartland."
Thai Philip (2017). Old Menace in New China: Coastal smuggling, illicit markets, and symbiotic economies in the early People’s Republic. Page 2
However, smuggling "…helped meet the daily needs of many individuals and firms—private, joint state–private, helped meet the daily needs of many individuals and firms—private, joint state–private,… Shortly after the outbreak of the Korean War, for instance, high-level leaders including Zhou Enlai and Bo Yibo called for ‘organized mass smuggling’ (zuzhi qunzhong zousi) in South China to circumvent the United Nations embargo to secure desperately needed materiel including fuel, medicine, and industrial hardware.12"
Thai (2017). Old Menace in New China. Pages 2-3
The main smuggling areas are along the coast, with Shanghai, Tianjin, Xiamen, Shantou and Guangzhou, but the primary source of smuggled goods came from the colonial enclaves Hong Kong and Macau.



The newly formed General Customs Administration
"...creating the first truly independent customs office in Chinese history – since its establishment in the nineteenth century it had always been under British control." Carrai M. (2019). Sovereignty in China: A Genealogy of a Concept since 1840. Page 156
, founded on October 19, 1949, still kept several employees who had worked for the GMD administration, like the former Deputy Inspector
Ding Guitang,
Ding Guitang (1891-1962). Inspector general (1943-1957) Rev.GMD Member first NPC
. At the beginning they were valued for their technical and administrative expertise. During the Sanfan, several staff members are fired. On April 18, 1951, the Provisional Customs Law was promulgated. The law stressed the importance of differentiating between major and minor cases of smuggling. Major smuggling was seen as counter revolutionary activities. However, most smugglers were not political motivated but by economics. Throughout Wufan, the public was urged to help fight smuggling and the People’s Courts held public trials and rallies for accused smugglers. The government was less lenient to traffickers who were officials.
Two groups are treated with lenience, Overseas Chinese and minorities. Overseas Chinese were allowed to enter China with some personal goods duty free. "Many travellers and returnees thus sought to profit (or even survive) by taking advantage of their politically privileged and separate status as well as their ties to foreign markets. Despite official exhortations that continued well into the 1960s encouraging them to turn instead to state-run units, many Overseas Chinese continued to rely on illicit channels to meet their needs. 60."
Thai (2017). Old Menace. Pages 20
Minorities are allowed to exchange commodities of daily necessities in small volumes in and out of China tax free.
Despite all measures the administration took, "Smuggled consumer products continued to be openly peddled in Shanghai markets well into the 1960s even after various anti-smuggling campaigns, while similar black markets operated in other cities including Guangzhou and Tianjin.79 They attracted buyers from all walks of life,..."
Thai (2017). Old Menace. Pages 25


The nature of the trade is changing from daily necessities to production goods. Production goods needed for the construction of a socialist economy. The Sino-Soviet agreement of 1950 provided the PCR with a credit of $ 300 million "The credits and interest on them would be repayed by the PRC through deliveries of raw materials, tea, gold, and American dollars. Prices for raw materials and tea, quantities and dates of deliveries would be fixed by special agreement, with prices again geared to world market prices."
Ginsburgs George (1976). The legal framework of trade between the USSR and the People's Republic of China. Page 7
However, a big part of the loan is used for purchase of war material for the Korea War and for expanding and rebuilding of the defense industry. Besides money, the SU also provided technical and technological documentation for the production of military equipment. In the period between 1949-1954 the trade balance of the PCR is negative, the import of production goods exceeds the export, so a part has to be financed by SU loans.
International trade PRC 1950-1954

On October 12, 1954, the SU and PCR signed a new agreement in which the SU provided China with a credit of 520 million rubles to finance the construction of 15 new industrial enterprises and the expansion of 141 enterprises already under construction. See Summary of 156 projects

"Agricultural produce-ranging from tea, silk and vegetable oils to cereals and hides-continues to dominate Chinese exports, although the proportion of non-ferrous and scarce metals in total exports- antimony, molybdenum, wolfram etc. has increased. Exports of pig iron and coking coal, which formerly went to Japan, are now exported to the USSR and Eastern Europe"
Scott N.B. (1958). Sino-Soviet Trade. Page 157
The export of PRC is in the first 2 years limited to agricultural products from the north and north-eastern regions. After the gradual restoration of the infrastructure, the export increased and "By 1952, nonferrous metals from the south and south-western areas of China occupied top place in the roster of Soviet imports from the PRC and the list of agricultural products now also expanded as the resources of China's central and southern provinces were tapped. 14"
Ginsburgs (1976). The legal framework of trade. Pages 26-27
Particularly in a province like Xinjiang, which is close to the border with the SU and rich in minerals, the change in trade volumes which took place, is abundantly clear.
Change in trade SU-China


Region 1


Soviet Union

On April 19, 1950, the first trade agreement between the SU and the PCR is signed, to emphasize the importance of the deal a ceremony was staged in Beijing on September 30, 1950. One of conditions is that prices for goods featured in Soviet-Chinese trade will be set in rubles on the basis of the prices existing on the world market. The preceding year served as an index for fixing prices. See article 4 of the agreement.
Document April 19, 1950




Hong Kong
Already in February 1949, a group of Chinese merchants in Singapore set up a barter deal with China. Shipments of rubber from Malaya were shipped to Hong Kong in exchange for soya beans from Northeast China.

"After 1951, Mainland China reaps an enormous amount of export surplus in her trade with Hong Kong and this surplus forms an important portion of foreign exchange for her to cover her trade deficits elsewhere end to repair her external debts."
Hung Chiu-ling (1968). An analysis of Mainland China's export to Hong Kong since 1950. Page 3-5. Hung continues "As a matter of fact, Mainland. China does not earn foreign exchange from Hong Kong by merchandise trade only. Part of the foreign exchange which is not shown by the trade statistics is derived from her invisible incomes from Hong Kong … in the forms of oversea remittances and food parcels etc." Page 3-7 see also Article 58
On December 3, 1950, the US administration introduced a complete embargo for PRC, Hong Kong and Macau. The US asked her allies to do the same. The UK government tried a different approach for Hong Kong. In the aftermath of the International Economic Conference in Moscow
The conference was held from 3 to 12 April 1952. Despite a boycott by Western governments, it was attended by about 450 individuals from 47 states
not only the PCR established the PIT (see above ) but also a British Council for the Promotion of International Trade was founded. The members of both councils had close ties with Chinese-British trade companies before 1949. The UK refused to implement shipping controls. "In fact, because of Hong Kong, British business had never severed its ties with mainland China. Shipment companies registered in Hong Kong, Singapore, Liberia, and Panama supported the ‘transformation’ of British or Chinese goods into something else, making it difficult to trace their real origins and allowing trade via Hong Kong to continue. It is true that many of the shipment companies showed the British flag, but around 50 per cent of shipment services for Socialist China’s trade were covered by cargoes and vessels flying the Greek flag.59"
Peruzzi Roberto (2017). Leading the Way: The United Kingdom’s financial and trade relations with Socialist China, 1949–1966. Page 32
Shao (1991) remarks "By the second half of 1950 it was clear that the Chinese government's trading was well represented in Hong Kong. There were trading, banking and other corporations which the new government took over from the old regime, along with their stock and personnel. Later it also established entirely new firms as branches of Beijing, Tianjin, Shanghai and Guangzhou organisations. Some firms were founded as Hong Kong companies, with or without direct or overt official connections. It appeared that these new organisations had made themselves successfully known and many European firms preferred to deal with them rather than continue with old contacts. "
Shao Wenguang (1991). China, Britain and businessmen: political and commercial relations, 1949-57. Page 43

China's export to Hong Kong 1952-1954 (%)
    Source: Hung Chiu-ling (1968). An analysis of Mainland China's export to Hong Kong since 1950. Page 4-4a


India Pakistan
The main product India export to China are jute products. Wang (1973) notices a political motive regarding foreign trade " In 1951, when India was facing a severe famine, China supplied India with a large quantity of rice under a barter arrangement. According to the June 8, 1952, issue ofJen min jih pao, an agreement was signed in the fall of 1951 between China and India which stated that China was to supply India with 66,000 tons of rice and 442,000 tons of sorghum. On May 26, 1952, a second agreement was signed for 100,000 tons of rice, and on October 13, 1952, a third agreement was signed for 50,000 tons of rice. From 1952, the volume of trade between the P.R.C. and India increased very rapidly until 1956, when it reached a plateau. It seems likely that this trade had considerable influence on India's position in the international arena in regard to matters affecting the P.R.C."
Wang Kenneth (1973). Foreign Trade Policy and Apparatus of the People’s Republic of China. Page 186

The trade with Pakistan consists largely of the export of raw cotton and jute and the import of cotton twist and yarn.


Region 2


Japan

In the 1950s, the US government dictated the foreign policy of Japan. The US-Japan Security Treaty signed on September 8, 1951, gave the Japanese few possibilities to make official contacts with the PCR.
In 1952, the Council for Furthering Japanese-Chinese Trade started its activities. This was a private organization organized by Japanese businessmen. On June 1, 1952
01-06-1952 First Agreement Sino-Japanese trade. It was barter trade because China did not have sufficient foreign currency to pay for imports
, and October 29, 1953
29-10-1953 Second Agreement Sino-Japanese trade
, trade agreements were concluded with the People's Republic of China. These agreement were valid for one year. The goods China exports are coal, iron ore, but the most important is rice. Japan delivers chemicals, equipment, and transportation media.


Ceylon Singapore

Region 3


The Eastern Europe countries did not have an independent policy towards the Chinese government. They acted in line with the directives of the SU. The main directive of this policy is to aid a ‘brotherly’ nation. Skřivan (2012) remarks "In the 1950s, the Beijing government was to some extent aware of this “non-independence” of Czechoslovak politics towards the PRC and clearly did not expect any diversions in the Czechoslovak-Chinese relations from the model of the Sino-Soviet relations. 44 Thus in a way, this state of affairs was convenient for both the Czechoslovaks and Chinese."
Skřivan Aleš (2012). On the expansion of the Czechoslovak economic relations with China after the establishment of the Chinese communist regime. Page 740

This observation can be applied to all Eastern Europe countries under SU control.

Poland
Poland expands his merchant fleet to export railway equipment, steel and tractors from the SU and other East Bloc countries, on the route to China, the ships load rubber at Ceylon. (On June 15, 1951 The China-Polish Joint Shipping Company was established. It was the first joint venture in People’s Republic of China. Started with 4 old vessels. Both governments had a 50% share.) In April 1951, Malaya and Singapore stopped exporting rubber to PCR.
Czechoslovakia
Like other East Bloc countries, Czechoslovakia helped Beijing overcome the problems arising from the trade embargo. Czechoslovakia became an important trade partner in relatively advanced technologies and in deliveries of military equipment. Machinery, trucks, and pipes were among the main commodities exported to the People's Republic of China. On May 6, 1952, an agreement concerning scientific and technical co-operation was signed.


Region 4


Trade with Western countries includes, vegetable oil, oil seeds, tea, wool, silk and foodstuff. Import tractors, electric power equipment, machine tools, chemical products. Wheat is imported from Canada and Australia in 1953 and 1954. In 1953 Belgium, Luxemburg, and FRG export chemical fertilizers. Finland exports paper and wood pulp. Switzerland exports dye, textile machinery, and medicines.
"...both West Germany and China recognized the importance of each other’s products. For the Federal Republic, China was simply too important as a source of raw materials. Some materials such as tungsten and soybean could simply find no comparable substitutes outside China. Others such as bristle and egg yolk could be imported from China at a lower price.62 In China, the quality of the West German products attracted the communist government to do business."
Ching Chung-cham (2006). Trade without flag: West Germany and China 1949-1972. Page 185
Trade between the two countries took place in a indirect way, all goods outbound to and inbound from China had to go through third countries.


UK FRG

From June 28 till July 9, 1954, a Chinese trade mission visited the UK. "They were given specific instructions by the authorities in Beijing to explain China's good faith and desire to normalise trade with Britain, and to be even-handed towards various British trade groups. The mission held discussions with about 25 trade associations, visited some 19 works, attended two well-arranged exhibitions, and held business talks with 56 firms."
Shao (1991). China, Britain and businessmen. Page 159
Trade with Belgium France and Italy

Wang (1971) considers the deal between France and the PRC in 1954 political motivated. "France sold one million tons of wheat to China, in a transaction which France found economically profitable. This transaction helped pave the way toward French diplomatic recognition of the People's Republic of China."
Wang (1973). Foreign Trade Policy. Page 186 note 12


US Canada


Region 5


In 1953 and 1954 Argentina exports wheat to China, it was limited a trade (non-governmental only). "In parallel with the lack of political relations, China's trade relations with the countries of the region in the early 1950s was also limited. Between 1950 and 1955, China's total trade volume with the countries of the region (namely Iran, Iraq, Kuwait, Oman, Saudi Arabia, and Yemen) amounted to only US$1.7 million. Chinese imports constituted over 75 per cent of that Total."
Huwaidin Mohamed Bin (2002). China's Relations with Arabia and the Gulf, 1949-1999. Page 97

Egypt
The trade with Egypt consisted mainly of cotton import.

Source: Guo Xiangyu and Henehan Brian & Schmit Todd (2008). Rural Supply and Marketing Cooperatives in China: Historical Development, Problems and Reform. Page 14
The Chinese industry has to rely on the internal market, because as seen above, the SU is limited in providing goods, and the Cocom restricts the import of essential goods. "… it is not surprising that the CCP quickly moved from an earlier pattern of regional autarchy on to the plane of relative national autarchy. In the border regions, the CCP advocated "sell native produce and boycott foreign goods" (...), and in the early 1950s the Party held aloft "taking domestic sales as primary and foreign sales for support" (..). ...the primary policy emphasis was on the development of domestic markets as outlets for China's native products."
Keith Ronald C. (1979). The Relevance of Border-Region Experience to Nation-Building in China, 1949-52. Page 281


Source: Excerpts from Peiping's foreign economic relations May 11, 1960 JPRS11560

27-02-1948 Mao Zedong "On the policy concerning industry and commerce"
20-04-1949 Liu Shaoqi Speech with officials responsible for domestic and foreign trade
01-01-1950 Chen Yun "Industry and commerce in Shanghai"
10-03-1950 GAC Decisions on Procedures Governing the Unification of State-Operated Trade
15-06-1950 Chen Yun "The current situation and measures for readjusting industry, commerce and taxation"
07-12-1950 State monopoly of the purchase of cotton yarn and cloth
01-06-1951 Calling upon the peasants to sell cotton to the state
20-07-1951 Chen Yun "Improving the work in the federations of industry and commerce"
25-06-1953 Chen Yun "The system for distributing grain"
02-10-1953 Enlarged PB meeting
10-10-1953 - 12-10-1953 National conference on planned purchasing and marketing of grain
10-10-1953 Chen Yun "Esteblishing state monopoly of the purchase and marketing of grain"
13-10-1953 Chen Yun "Measures to ensure a sufficient supply of cooking oil"
23-11-1953 Decision of the GAC on the Implementation of the Planned Purchase and Planned Supply of Grain
28-11-1953 Chen Yun "Increasing production and sale of non-staple food"
25-07-1954 Constitution of the SMC
13-07-1954 Chen Yun "Thightening control over the market and transforming private commerce"
23-09-1954 Chen Yun "Some ideas about the system of planned purchase and supply
27-02-1948 Mao Zedong "On the policy concerning industry and commerce"





The CCP Central Committee, “Instructions on Problems Concerning Foreign Trade Policy,” February 16, 1949 Cited in Chen Jian (1994). China's Road to the Korean War: The Making of the Sino-American Confrontation. Pages 12-13 Back
O'Brien Neil L. (2004). An American editor in early revolutionary China. John William Powell and the China Weekly/Monthly. Page 108 Back
Mitcham Chad J. (2005). China’s Economic Relations with the West and Japan, 1949–79. Grain, trade and diplomacy. Page 4 Back
a.k.a. ‘the Paris Group, created in 1949 with the following countries: Belgium, Canada (1950), Denmark (1950), France, West Germany (1950), Greece (1953), Italy, Japan (1953), Luxembourg, Netherlands, Norway (1950), Portugal (1952), Turkey (1953), United Kingdom, and United States. Its purpose is to inhibit the transfer of military or dual use technologies to the SU and Eastern Bloc countries. The counterpart is the Council for Mutual Economic Assistance or Comecon (January 1949). The members included SU, Bulgaria, Czechoslovakia, Hungary, Poland, Romania, Albania and, East Germany. Although the PRC wanted to become a member, Stalin refused. Libbey (2010) remarks "The explanations for Comecon’s birth are only vaguely related to the notion of a common market. First, and most obviously, the group gave substance and organization to the Soviet Union’s economic war with Yugoslavia. This war had a side benefit of providing the institutional means of excluding Yugoslavia’s disease of independence from Eastern Europe’s economic development." Libbey James K. (2010). CoCom, Comecon, and the Economic Cold War. Page 141 Back
"The lists were divided into four categories or classes. Class 1 included all military goods such as guns, ammunition or tanks, or machinery for their manufacture, such as special machine tools and extrusion presses, electronic equipment, vacuum tube machinery, blast furnaces, oil drilling equipment, tractors, trucks, merchant ships, and all strategic chemicals such as benzine, sodium, mercury, all nitrates and nitric acid, tin, zinc, lead and copper. Class 1A included military and semi-military items such as radio equipment, ultra-violet equipment, broad-band communication equipment and large pressure vessels. Class 2 contained products of industrial potential to the East such as road-building equipment, excavators, engines, steel, cast-iron and plate glass. In Class 3 were items regarded as important in maintaining the basic economy such as office machinery, plumbing equipment, needles and matches. Class 4 was the catch-all category embracing all items not elsewhere listed." Frank Cain (1995). The US‐led trade Embargo on China: The origins of CHINCOM, 1947–52. Page 34 Back
Most-favored-nation status guarantees a nondiscriminatory US tariff rate to the foreign exporter. Back
A large part of the increased imports consisted of steel and iron products and machinery from France and FRG. Synthetic textile, fibers from Italy. The UK exported more industrial and chemical fertilizers and also wool and textile machinery. November 1949: 86, November 1951: 270, January 1952: 285, March 1954: 265, August 1954: 170 items were on the COCOM list.
Volume of import in 1st part of 1952 compared with 1st part of 1953

Source: CIA (1953). Communist China import and export 1952. Page 116. In US $ Back
Wang Kenneth (1973). Foreign Trade Policy and Apparatus of the People’s Republic of China. Pages 196-197 Back
Solinger Dorothy J. (1980). Socialist Goals and Capitalist Tendencies in Chinese Commerce, 1949-1952. Page 200 Back
The China Publication Centre, which is not a corporation, is responsible for the export of books and periodicals. Officially, they are not considered a trading corporation and therefore, not directly under the Ministry of External Trade." Hung Chiu-ling (1968). An analysis of Mainland China's export to Hong Kong since 1950. Page 5-10 Back
Skřivan Aleš (2017). On the Character of the Foreign Trade of the People’s Republic of China in the Period 1949–1969. Page 167 Back
In 1952, the China Committee for Promotion of International Trade compiles "New Chinas Economic Achievements 1949-1952." Back
Mitcham (2005). China’s Economic Relations with the West and Japan, Page 6 Back
Thai Philip (2017). Old Menace in New China: Coastal smuggling, illicit markets, and symbiotic economies in the early People’s Republic. Page 2 Back
Thai Philip (2017). Old Menace in New China. Pages 2-3 Back
"...creating the first truly independent customs office in Chinese history – since its establishment in the nineteenth century it had always been under British control." Carrai M. (2019). Sovereignty in China: A Genealogy of a Concept since 1840. Page 156 Back
Thai (2017). Old Menace. Pages 20 Back
Thai (2017). Old Menace. Pages 25 Back
Ginsburgs George (1976). The legal framework of trade between the USSR and the People's Republic of China. Page 7 Back
Scott N.B. (1958). Sino-Soviet Trade. Page 157 Back
Ginsburgs (1976). The legal framework of trade. Pages 26-27 Back
Hung (1968). An analysis of Mainland China's expor. Page 3-5 Hung continues "As a matter of fact, Mainland. China does not earn foreign exchange from Hong Kong by merchandise trade only. Part of the foreign exchange which is not shown by the trade statistics is derived from her invisible incomes from Hong Kong … in the forms of oversea remittances and food parcels etc." Page 3-7 see also Article 58 Back
The conference was held from 3 to 12 April 1952. Despite a boycott by Western governments, it was attended by about 450 individuals from 47 states. Back
Peruzzi Roberto (2017). Leading the Way: The United Kingdom’s financial and trade relations with Socialist China, 1949–1966. Page 32 Back
Shao Wenguang (1991). China, Britain and businessmen: political and commercial relations, 1949-57. Page 43 Back
Wang (1973). Foreign Trade Policy. Page 186 Back
Skřivan Aleš (2012). On the expansion of the Czechoslovak economic relations with China after the establishment of the Chinese communist regime. Page 740 Back
Ching Chung-cham (2006). Trade without flag: West Germany and China 1949-1972. Page 185 Back
Shao (1991). China, Britain and businessmen. Page 159 Back
Wang (1973). Foreign Trade Policy. Page 186 note 12 Back
Huwaidin Mohamed Bin (2002). China's Relations with Arabia and the Gulf, 1949-1999. Page 97 Back
Keith Ronald C. (1979). The Relevance of Border-Region Experience to Nation-Building in China, 1949-52. Page 281 Back