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Geopolitical preamble to China’s opening up In a way, China’s opening-up strategy started already as early as the launch of the “ping-pong diplomacy” in April 1971 and the following “whirlwind” visit to Beijing by Richard Nixon, President of the United States, in February 1972. Both events took place well ahead of the promulgation of the gaige kaifang (reform and opening up) strategy following the celebrated Third Plenum held in Beijing in December 1978 for the 11th National Party Congress. The “incidents ”, which then caught the world in great surprise, were undoubtedly initiated on the part of China as a response to the bloody military conÁicts in 1969 with the former Soviet Union on the Zhenbao Island in Heilongjiang (or Amur River). Subsequent to the clashes, the former socialist superpower deployed massive ground forces to the Mongolian regions bordering China. For the Chinese leadership, the threat from the North was clearly much more immediate than from its arch-rival, the United States, which had subjected the entire coastal belt of China to long-term containment ever since the founding of the People’s Republic in 1949, or at least, from the end of the Korean war in 1953. For the United States, however, wary of the unpredictable Moscow regime with its massive buildup of nuclear arsenals—especially since the Cuban Missile Crisis of 1962, the Chinese initiative for a rapprochement was clearly to be embraced as a windfall to help check the new and aggressive global power. Upon returning from his secret visit to Beijing in July 1971 in preparation for Nixon’s trip, Henry Kissinger, then Secretary of State, likened Premier Zhou Enlai—his counterpart negotiator while in Beijing—to the nineteenth century Austrian Chancellor, Clemens von Metternich, whose name is still often cited in standard political science textbooks for his master grip on power politics and regional balance of powers. Rightly, as Kissinger sees it, Premier 1 Introduction Economic Imperatives versus Geopolitics 2 Pax Sinica Zhou was fully conÀdent about how to Àt China—the weakest link—into the triangular global power constellation involving the two superpowers and the ancient oriental culture. What almost immediately followed the 1972 Mao-Nixon encounter in Beijing is familiar: the emerging Sino-American political detente prompted China to quickly import, in a Àrst ever attempt since 1949, a remarkable array of chemical fertilizer plants from the United States as early as 1973/1974. The about-face, ostensibly out of speciÀc agricultural policy requirements, resembles in a way but falls far short of—in terms of quantitative scale of imports involved—the drastic trade reorientation towards Western Europe and Japan in 1962 following the abrupt withdrawal in 1960 of Soviet economic and technical aid to China. However, while the 1962 new policy plank of China was triggered by immediate economic imperatives rather than anything else, the modest venture of 1973/1974 signalled palpably a deÀnitive and signiÀcant political gesture, which eventually led to the restoration of formal diplomatic relations between the two countries in 1978. This was to strongly help pave the way for accelerated bilateral trade growth and open up diverse and signiÀcant venues for China to rigorously expand trade with Europe, Japan and other countries, large and small, which were traditionally allied with the United States. The rest is history. A brief revisit: • China admitted as a member of both IMF (International Monetary Fund) and the World Bank in 1980, hardly a year into the gaige kaifang strategy; • accelerated foray of FDI (foreign direct investment) accompanied increasingly by technology transfer into China from non-socialist countries since the early 1980s; • fourteen major coastal cities declared open in April 1984 for foreign investment following the establishment earlier in 1979/1980 of the four Special Economic Zones (SEZs) in Guangdong and Fujian provinces, especially for export-oriented FDI from Hong Kong; • Àrst major reform blueprint announced by the Third Plenum (of the 12th National Party Congress) held in October 1984 for bifurcating Sovietstyle central planning into a two-track (planned and market-oriented) resources allocation system, following the granting of expanded decision autonomy to state-owned enterprises (SOEs) in May; • China applying for accession to WTO (World Trade Organization) in 1986, reÁecting willingness of the country to be gradually subjected to the market-based rules of the Western system of free trade and investment Áows; Introduction 3 • market-oriented reform experiments being further consolidated into the landmark resolution of the 13th NPC of...


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