Economic Cold War: America's Embargo against China and the Sino-Soviet Alliance, 1949-1963, and: China and the Global Economy: National Champions, Industrial Policy, and the Big Business Revolution (review)

Shu Guang Zhang's book, the second publication in the Cold War International History Project series, examines the impact of a frequently used but not fully understood tool of international relations, the economic embargo. The study takes a particular context: the adversarial relationship between China and the United States and its allies from the setting up of the People's Republic of China in 1949 to the emergence and final collapse of the Sino-Soviet Alliance in the early 1960s.

Access to hitherto restricted government documents and other sources in the United States, Europe, and China enabled Zhang to contrast the development of economic policy in the West with China's reactions. The author takes an interactive approach, contrasting move and countermove during successive periods between 1949 and the early 1960s, demonstrating that China-related economic embargoes were not passively received but instead spurred the Chinese government to attempt to find ways around the economic constraints the embargoes imposed. The discussion emphasizes that countries naturally react to the imposition of embargoes, which therefore can be a source of innovation within nations. In China's case, however, reaction to economic embargoes met with mixed success and, one could argue, even led to implementation of disastrous policies.

Zhang cogently examines the background to the development of economic embargoes against China, but he also critically assesses the whole question of the motivation for and use of this international relations tool. He argues that the success or failure of an embargo is often not fully known until long after it has been applied and, sometimes, until after it has been removed. Although impacts can be inferred, the target country will often attempt to offset the worst results of embargoes through the use of tactics that give the outward impression that a particular embargo is not having an appreciable effect on the country (or, as has happened in the recent past, that the weakest sections of the community are suffering unjustly). China took a particularly robust approach to U.S.-led embargoes, attempting to minimize their effects by building relationships with nonaligned nations and, in part, by building relationships with Moscow, something that the United States had concerns about from the early days of the People's Republic of China.

The China Differential, as it became known ("differential" because the economic policies directed by the United States and its allies at China were different and more constraining on trade than the policies directed at the Soviet Union and its European area of influence), came under increasing pressure as the United States' allies (particularly the United Kingdom) found trade with China more attractive. The United States was eventually forced to carry on with a unilateral policy after many European countries effectively abandoned the Differential in the late 1950s.

Zhang's argument that the maintenance of the embargo had a significant effect on the breakup of the Sino-Soviet Alliance is not as clear as other arguments in the book. The relationship between China and Russia was originally founded on strained relationships in Stalinist times, and high-level disagreements seem to have adversely affected the alliance throughout its history. Nevertheless, although whether the economic impact of American policy had a role in the final fall of the Sino-Soviet Alliance is still a matter for conjecture, Zhang provides a highly readable and detailed account of the development of economic policy against China and of China's varying degrees of success in taking measures to minimize the effects of such policies.

Peter...