IMPERIALISM REVISITED

IMPERIALISM REVISITED

STUDIES IN MILITARY AND STRATEGIC HISTORY General Editor: Michael Dockrill, Reader in War Studies, King's College, London Published titles include: Nigel John Ashton EISENHOWER, MACMILLAN AND THE PROBLEM OF NASSER: Anglo-American Relations and Arab Nationalism, 1955-59 G. H. Bennett BRITISH FOREIGN POLICY DURING THE CURZON PERIOD, 1919-24 David A. Charters THE BRITISH ARMY AND JEWISH INSURGENCY IN PALESTINE, 1945-47 Paul Cornish BRITISH MILITARY PLANNING FOR THE DEFENCE OF GERMANY, 1945-50 Robert Frazier ANGLO-AMERICAN RELATIONS WITH GREECE: The Coming of the Cold War, 1942-47 Brian Holden Reid J. F. C. FULLER: Military Thinker Stewart Lone JAPAN'S FIRST MODERN WAR: Army and Society in the Conflict with China, 1894--95 Thomas R. Mockaitis BRITISH COUNTERINSURGENCY, 1919-60 Roger Woodhouse BRITISH POLICY TOWARDS FRANCE, 1945-51 Studies In Military and Strategic History Series Standing Order ISBN 978-0-333-71046-3 (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or. in case of difficulty. write to us at the address below with your name and address. the title of the series and the ISBN quoted above. Customer Services Department. Macmillan Distribution Ltd Houndmills. Basingstoke. Hampshire RG21 6XS. England

Imperialism Revisited Political and Economic Relations between Britain and China, 1950-54 David Clayton Lecturer in Economic History University of York ~ ~ in association with ~ ~ Palgrave Macmillan

First published in Great Britain 1997 by MACMILLAN PRESS LTD Houndmills. Basingstoke. Hampshire RG21 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN 978-1-349-13831-9 ISBN 978-1-349-13829-6 (ebook) DOI 10.1007/978-1-349-13829-6 First published in the United States of America 1997 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division. 175 Fifth Avenue. New York. N.Y. 10010 ISBN 978-0-312-17320-3 Library of Congress Cataloging-in-Publication Data Clayton. David. 1%9- Imperialism revisited: political and economic relations between Britain and China. 1950-54 / David Clayton. p. cm. (Studies in military and strategic history) Includes bibliographical references. ISBN 978-0-312-17320-3 (cloth) I. China-Foreign relations-great Britain. 2. Great Britain -Foreign relations-china. 3. China-Foreign relations-1949-1976. 4. Grcat Britain-Foreign relations-1945-5. China-Foreign economic relations-great Britain. 6. Great Britain-Foreign economic relations-china. I. Title. II. Series. DS740.5.G7C53 1997 96-49262 CIP David Clayton 1997 Softcover reprint of the hardcover 1st edition 1997 All rights reserved. No reproduction. copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced. copied or transmitted save with written permission or in accordance with the provisions of the Copyright. Designs and Patents Act 1988. or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency. 90 Tottenham Court Road. London WI P 9HE. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright. Designs and Patents Act 1988. This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. 10987654321 06 05 04 03 02 01 00 99 98 97

Contents List of Tables Acknowledgements List of Abbreviations Introduction History Revisited: Sino-British Political Relations, January-June 1950 10 2 The Origins of 'Two Chinas', 1950-54 32 3 Roll Back not Relations, June-October 1950 53 4 Fear and Loathing, November 1950-0ctober 1951 73 5 Empire Retained: Hong Kong, 1950-54 96 6 Ending Informal Empire: British Business in China, 1950-54 123 7 A Most Unfavoured Trading Nation: China, 1950-54 139 8 Stalemate and Restraint, November 1951-July 1953 161 9 Rapprochement Denied, July-December 1953 183 Conclusions 199 Appendix 209 Notes 213 Bibliography 262 Index 276 vi vii viii v

List of Tables 2.1 US Aid to Taiwan, 1951-54 42 6.1 British Investments in China, 1930 and 1936 124 7.1 China's Imports from Selected Countries, 1950-54 140 7.2 China's Exports to Selected Countries, 1950-54 141 7.3 Total Trade between Britain and China, 1946-54 142 7.4 Total Trade between Britain and Hong Kong, 1946-54 143 7.5 Chinese Repayment of Loans and Interest and Foreign Exchange Payment to the USSR, 1950-57 149 Al British Foreign Resident Community in China, 1899-1951 209 A2 Commodity Composition of British Imports from China, 1946-54 209 A3 Commodity Composition of British Exports to China, 1946-54 210 A4 Commodity Composition of British Imports from Hong Kong, 1946-54 210 A5 Commodity Composition of British Exports to Hong Kong, 1946-54 211 A6 Commodity Composition of China's Imports and Exports, 1950-54 211 A7 Commodity Structure of Chinese Trade with the Soviet Union, 1950-54 212 vi

Acknowledgements The bulk of the research for this book was undertaken for a PhD thesis at the University of Manchester, which was funded by the British Academy. I would like to thank Dr Peter Lowe for his guidance, advice and encouragement. A special word of thanks to Peter for striking the perfect balance, being both enthusiastic and patient. I would also like to thank colleagues and peers with whom I have discussed my research in the Department of History at the University of Manchester, and in the Department of Economics and Related Studies at the University of York. The environments they have created and questions they have posed were and continue to be of great stimulation. I should also like to acknowledge the help offered by librarians and archivists in the various libraries, archives and research centres visited. My special appreciation to the staff of the Public Record Office, Kew and John Rylands University Library, Manchester. Further thanks to those who have aided my research at the School of African and Oriental Studies, the London School of Economics, the Institute of Historical Research, the Labour Party Archives, the Central Reference Library, Manchester and the J.B. Morrell University Library, York. The assistance, advice and release provided by family and friends has been essential throughout. I am indebted to numerous people for their comments on various chapters, most notably Jenny Clayton, Mick Nevin, Norris Nash and Lauren. In the end, I am responsible for all errors and omissions in this work. Throughout my life, my parents have offered encouragement and never questioned the path I have taken; I thus dedicate the book to them. vii

List of Abbreviations ABBREVIATIONS USED IN TEXT BAT CAAC CAT CATC CCP CHINCOM CNAC COCOM CPG DPRK ECAFE ECOSOC FBI FTU GATT ICI IMF KMT MAAG NSC PLA PRC ROK SCAP TUC UNICEF British-American Tobacco Company Civil Aviation Administration of China Civil Air Transport Central Air Transportation Corporation Chinese Communist Party China Co-ordinating Committee Chinese Nationalist Aviation Corporation Co-ordinating Committee of the Paris Consultative Group of nations working to control export of strategic goods to communist countries. Chinese People's Government Democratic People's Republic of Korea (North) Economic Commission for Asia and the Far East (UN) Economic and Social Council (UN) Federation of British Industries Federation of Trade Unions (Hong Kong) General Agreement on Tariffs and Trade Imperial Chemical Industries International Monetary Fund Kuomintang (Chinese Nationalists) Military Assistance Advisory Group (US) National Security Council People's Liberation Army People's Republic of China Republic of Korea Supreme Commander for Allied Powers in Japan Trade Union Congress United Nations International Children's Emergency Fund ABBREVIA nons USED IN SOURCES BDCC BT British Defence Co-ordination Committee Board of Trade Records viii

Abbreviations ix CAB CCFELF CHAS CO CPGB DBPO DDRS Defe DO FO FRUS IRD JCS LPA LPPCC MoD MoT NEC NIB PREM UKHC Cabinet Office Records Commander in Chief Far East Land Forces (British) China Association Papers Colonial Office Records Communist Party of Great Britain Documents of British Policy Overseas Declassified Documents Series (US) British Chiefs of Staff/Joint Planning Staff Records Defence Committee of the Cabinet Records Foreign Office Records Foreign Relations of the US Information Research Department, Foreign Office Joint Chiefs of Staff Labour Party Archives Labour Party Press Cuttings Collection Ministry of Defence Ministry of Transport (& Civil Aviation) National Executive Committee, Labour Party National Intelligence Estimate British Prime Minister's Office Records United Kingdom High Commissioner