The Domestic and International Arrangements of Maoist “Self-Reliance”: Chinese Trade with the Two Germanies, 1949–1978

Sandy Xu, UCLA

China’s trade policy of “self-reliance,” or avoiding external liabilities, during the Maoist period (1949–1978) is credited with laying the foundation for its subsequent economic ascent during the reform period (1978¬1996). “Self-reliance” involved sourcing capital imports from both sides of the Cold War, trading with socialist and capitalist states. In so doing, China eluded balance of payments problems and foreign loans, unlike much of the developing world, which subsequently succumbed to the debt crises of the 1980s. However, China’s adherence to “self-reliant” trade policy is itself a puzzle, as its foreign trade operations faced many domestic and international institutional challenges. Maoist politics reduced the “Weberian” effectiveness of the trade bureaucracy, while US-led economic sanctions, tensions with the Soviet Union, and China’s lack of UN recognition constrained trade prospects. What social forces, then, enabled adherence to “self-reliance” in spite of such hostile domestic and international political economies? To answer this question, I draw on both internal and external theories of development to disaggregate “self-reliance” into four historical processes. The first two processes concern the domestic arrangements underpinning trade policy: 1) the recruitment, training, and management of trade bureaucracy staff; and 2) the development of trade bureaucracy relations with other state agencies. The last two processes concern how domestic institutions interfaced with international arrangements and macro-historical trends: 3) how trade researchers and planners made sense of world markets and “shopped around” in them; and 4) how trade officials navigated Cold War geopolitics. I compare Chinese trade with East and West Germany to trace two Cold War trade logics. Socialist trade was determined by bilateral agreements and fulfilled through barter, while capitalist trade required direct negotiation with private firms and hard currency payments. My comparative-historical analysis triangulates primary and secondary sources from German and Chinese institutions.

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 Presented in Session 39. Power, Governance, and Political Economy