Poll: Mao Floods the Market

Maoist China floods the market with...

  • Rice

    Votes: 23 52.3%
  • Wheat

    Votes: 16 36.4%
  • Cotton

    Votes: 6 13.6%
  • Soybeans

    Votes: 11 25.0%
  • Tea

    Votes: 12 27.3%
  • Corn

    Votes: 8 18.2%
  • Sugar

    Votes: 11 25.0%
  • Something Else

    Votes: 12 27.3%

  • Total voters
    44

Lusitania

Donor
During the famine caused by the Great Leap Forward China was exporting grain. Millions of deaths wasn't something he had a problem with.
Yes China was but to accomplish the exports indicated in the thread the amount of exports would substantially need to be increased. The Chinese could not sustain those loses. Mao would be overthrown
 

bguy

Donor
Tarifs above subsidies most likely but the effects on the global market would still be wide reaching as US export dominance in certain sectors (wheat for instance) would be threatened in regions such as Africa, Central and South America.

Well the prospect of China interfering with U.S. export markets in this way is why I think farmers would insist on subsidies rather than (or at least in addition to) tariffs. Tariffs only protect the U.S. market for them while subsidies insure they stay prosperous regardless of whatever market penetration China achieves in the rest of the world. And if framed as a Cold War measure, such subsidies would easily pass.

Still I don't think it would even get to that point where subsidies or tariffs would be necessary because I don't see how China in the 1950s would even have the shipping capacity to do mass food exports to the rest of the world without the cooperation of the United States. A roused U.S. could simply pass legislation that bars any shipping company that transports Chinese goods from being able to do business in U.S. ports. No international shipping company in the 1950s is going to chose access to the minuscule Chinese market over the enormous U.S. market, so such a measure would effectively deny China access to the vast majority of the world's shipping capacity. (The Soviet merchant marine was tiny in the 1950s, so its not as though they could pick up the slack.) So how exactly is Mao going to be able to transport Chinese goods to Africa or Central and South America?
 
Well the prospect of China interfering with U.S. export markets in this way is why I think farmers would insist on subsidies rather than (or at least in addition to) tariffs. Tariffs only protect the U.S. market for them while subsidies insure they stay prosperous regardless of whatever market penetration China achieves in the rest of the world. And if framed as a Cold War measure, such subsidies would easily pass.

Still I don't think it would even get to that point where subsidies or tariffs would be necessary because I don't see how China in the 1950s would even have the shipping capacity to do mass food exports to the rest of the world without the cooperation of the United States. A roused U.S. could simply pass legislation that bars any shipping company that transports Chinese goods from being able to do business in U.S. ports. No international shipping company in the 1950s is going to chose access to the minuscule Chinese market over the enormous U.S. market, so such a measure would effectively deny China access to the vast majority of the world's shipping capacity. (The Soviet merchant marine was tiny in the 1950s, so its not as though they could pick up the slack.) So how exactly is Mao going to be able to transport Chinese goods to Africa or Central and South America?

Maybe a mass shipbuilding campaign as part of the Great Leap Forward?
 

bguy

Donor
Maybe a mass shipbuilding campaign as part of the Great Leap Forward?

Maybe, but how long would it take Communist China to build up an adequate merchant fleet? Especially since they are already starting from a pretty big deficit in the 1950s.

From the CIA's "Annual Review of Merchant Shipping in the Sino-Soviet Bloc 1959" pg .4

"The Chinese Communists remained completely dependent on foreign flag shipping to move their international seaborne trade, which amounted to about 11 million metric tons in 1959. In addition, the Chinese relied on foreign shipping to move more than 5 million tons of coastal shipping.

https://www.cia.gov/library/readingroom/docs/DOC_0000494002.pdf

So if China gets cut off from international shipping companies then it is going to need to build millions of tons of shipping just to maintain its own inter-coastal trade and the international trade it already conducts, before it can even think about starting to expand its international trade. Building that much shipping is going to take a long time and be very expensive.
 
...From the CIA's "Annual Review of Merchant Shipping in the Sino-Soviet Bloc 1959" pg .4

"The Chinese Communists remained completely dependent on foreign flag shipping to move their international seaborne trade, which amounted to about 11 million metric tons in 1959. In addition, the Chinese relied on foreign shipping to move more than 5 million tons of coastal shipping.

https://www.cia.gov/library/readingroom/docs/DOC_0000494002.pdf...

Whoa Nellie!

How the heck did that work? I mean mainly, who were the foreign flagged shippers who who hauled all that coastwise trade as well as hauling in every single item of import and away every item exported?

Were the ships all Japanese? South Korean? Taiwanese? Filipino?

Of course not, I assume. But who?

I downloaded and skimmed the report. It seemed that the Chinese reliance on foreign flag shipping, much of it chartered, for coastwise shipping is explained not so much because China lacked the tonnage as because the Taiwanese interdicted coastwise movement along the shore, separating north shore from southern shore markets--I presume the foreign flagged ships, chartered and hired ad hoc, would put out to sea far to the east versus a rational coastal route, giving Taiwan a wide berth--they could threaten to fire on ships in a declared war zone perhaps, but doing so in wide waters far from land would amount to piracy. So, in effect a portion of China's coastwise trade was apparently transformed into medium-range international trade due to Taiwanese hostility (effective because tacitly backed by the USA of course).

Meanwhile 100 percent of China's international trade, setting aside a tiny trickle to North Korea and North Vietnam which the report remarks Chinese would count as coastal anyway, was in the hands of foreign flag merchants.
.
So I have to wonder, just what national flags did these ships fly, and who were the ship owners who profited with fees paid presumably in hard currency and cargoes they could sell profitably in non-Communist ports. Apparently I have to go on wondering, because the report does not discuss it. I might guess that at least some of that shipping might have been Soviet bloc, Soviet and other East bloc ships operating in the Pacific. Such ships could even be paid in PRC scrip.

Nevertheless--I doubt that the foreign shipping was entirely Red Flag; a certain amount of it is capitalist, with captains presumably cautious about coming in to ports where they might conceivably have their cargoes or even ships seized and themselves and crews imprisoned or pressed into Chinese service--therefore if trade with capitalist flagged vessels happened, they must have enjoyed both strong assurances of their safety, and enticed with a combination of fees in negotiable currency and/or cargoes of attractive profitability to entice them both to take risks and to incur the wrath of regimes such as Taiwan.

In fact, I think it would have been entirely possible for the USN to simply shut China out of global trade completely had doing as much damage to the PRC as possible been our overriding goal. If the leading western powers would concur with a US policy of strangling the PRC, Taiwanese ships (if necessary, the rump ROC navy could be outfitted with extra gift ships as needed) could fan out to interdict all of the Chinese ports, blockading all foreign flag ships from approaching. Perhaps such a policy would have been feasible if the Soviet bloc tonnage was too small to meet the PRC needs--intercepting ships US flagged, British, Liberian or Panamanian is something the USN could get away with, and under a widely understood US aegis, the RoC navy could do it too. But a Soviet bloc ship, approaching such a blockade line, would be within its rights to ignore demands to heave to and surrender to inspection for contraband; if fired upon and sunk, the Soviets could respond with a declaration of war on Taiwan--assuming they don't want to go directly there, convoys of various Eastern bloc flagged ships could approach escorted by detachments of the Soviet Navy. In this case RoC ships would have fire returned to them if they tried to violently insist on detaining the merchant ships; no longer operating with impunity the Taiwan regime could either see its fleet sunk, or declare war in the hope the US will join them in starting WWIII.

Given then that Eastern bloc ships could attempt to provide the PRC with all her foreign shipping needs, I suppose that Western governments, especially Britain for instance, or Norway, asked why shouldn't their nationals profit from trading with the PRC instead? (A possible answer would be--the Eastern bloc fleet is too small as yet, requiring years or more of shipbuilding to provide the hulls to cover both European and Chinese trade, so forcing the PRC to rely exclusively on eastern shipping would put a crimp in both Soviet and PRC development rates)

But of course OTL there was no such blockade, beyond a localized, partial interdiction of trade right at the straits of Taiwan, which as noted did impose extra costs on Beijing.

I would guess then that while a part of the trade might have been carried in East European bloc hulls, most of it was in fact carried by enterprising capitalist ships making a brisk profit catering to the development of their alleged ideological nemesis and downfall.

The fact that the British government recognized the PRC very quickly after the 1949 defeat of the KMT on the mainland I have always seen attributed mainly to the pragmatism of British foreign policy; it not being customary to use recognition as a tool to reward or punish nations for compliance with ideology, as the USA does.

But how much of this is the simple pragmatism of catering to the interests of British nationals who might look to turn to making a quick profit off of trading with someone who might in the long run prove a very grave enemy indeed? To what degree did Britain recognize the PRC early on, and thus repudiate the KMT in exile on Taiwan, simply because British flagged merchant captains wished to cash in on the vast PRC market before their competitors did?

It puts the Cold war in perspective, to realize that the number 2 Communist power was dependent on paying capitalist run shipping, and that capitalists were making money dealing with Mao.
 

bguy

Donor
Whoa Nellie!

How the heck did that work? I mean mainly, who were the foreign flagged shippers who who hauled all that coastwise trade as well as hauling in every single item of import and away every item exported?

Unfortunately, the report doesn't seem to reference which percentage of foreign flagged ships were Free World and what percentage were Community block. It does though provide the percentages for new Chinese ships in 1959. 40% from Free World shipyards, 15% from Soviet Bloc shipyards, and the remaining 45% produced domestically. And the report also mentions that the Soviet Bloc itself relied heavily on Free World ships with the Soviets relying on "foreign shipping" to move 47% of the Soviet foreign trade in 1959. Thus with the Soviets themselves being dependent on Free World shipping, and given that the Chinese were clearly buying a great number of ships from the Free World, I think it is safe to conclude that a large percentage of the ships hauling Chinese goods at that time were Free World ships.

In fact, I think it would have been entirely possible for the USN to simply shut China out of global trade completely had doing as much damage to the PRC as possible been our overriding goal. If the leading western powers would concur with a US policy of strangling the PRC, Taiwanese ships (if necessary, the rump ROC navy could be outfitted with extra gift ships as needed) could fan out to interdict all of the Chinese ports, blockading all foreign flag ships from approaching. Perhaps such a policy would have been feasible if the Soviet bloc tonnage was too small to meet the PRC needs--intercepting ships US flagged, British, Liberian or Panamanian is something the USN could get away with, and under a widely understood US aegis, the RoC navy could do it too.

It probably wouldn't be that difficult for the U.S. to "persuade" the Panamanian and Liberian governments to prohibit their ships from being allowed to operate in Chinese ports either.

Given then that Eastern bloc ships could attempt to provide the PRC with all her foreign shipping needs, I suppose that Western governments, especially Britain for instance, or Norway, asked why shouldn't their nationals profit from trading with the PRC instead? (A possible answer would be--the Eastern bloc fleet is too small as yet, requiring years or more of shipbuilding to provide the hulls to cover both European and Chinese trade, so forcing the PRC to rely exclusively on eastern shipping would put a crimp in both Soviet and PRC development rates)

it also depends on how much pressure the U.S. is willing to apply against her allies. If the U.S. is angry enough at China to be willing to go the full Suez and threaten to set off a run on the pound if Britain keeps trading with China, then the British would probably go along with the U.S. demands. (China appears to have been less than 1 percent of Britain's foreign trade in the 1950s, so Chinese trade is hardly worth a major breach with the U.S.)

http://sas-space.sas.ac.uk/3393/1/Journal_of_International_History_2000_n6_Clayton.pdf

But how much of this is the simple pragmatism of catering to the interests of British nationals who might look to turn to making a quick profit off of trading with someone who might in the long run prove a very grave enemy indeed? To what degree did Britain recognize the PRC early on, and thus repudiate the KMT in exile on Taiwan, simply because British flagged merchant captains wished to cash in on the vast PRC market before their competitors did?

I imagine early recognition was probably more about protecting the British interests in Hong Kong, but being able to profit from trading with the Chinese would certainly have been a nice bonus.
 
Whoa Nellie!

snip

Interesting suppositions
I guess it would come down to how much pressure the US could place on foreign nation's to not provide merchant vessels to TTL's Great Leap Forward program.

I think we can safely assume the UK would be out, but France, South American nations, maybe the Nordics could nominally pick up the slack.
Again it might be enough to disrupt the pricing of said goods, especially if China chose to dump the stuff for free on the Market.
And as to concerns about whether 1960s China could actually feed it's own populace while doing this, the lack of crash course urbanization (as a part of TTLs Great Leap Forward) would create less stress on food production given that more people could be directed to farm communes rather than city industrial jobs.

Moreover, since "Rice" seems to be in the lead in the poll, can anyone game out what a global market flooded with People's Rice might do to east Asian economies?
 
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Moreover, since "Rice" seems to be in the lead in the poll, can anyone game out what a global market flooded with People's Rice might do to east Asian economies?

I can say for sure that China dumping rice in Asia would not affect the Japanese who even today still refuse to import rice (and engage in frankly bizarre practices to get away with it vis-a-vis the WTO)

More generally, the thing with China dumping food in the early 1960s is that the world in OTL already experienced a dramatic shift in food production in the same time period because of Norman Borlaug, whose agronomics turned Mexico from a net importer to net exporter of food in the late 1950s. With Borlaug's wheat innovations, Pakistan was self-sufficient in food production by 1968 and India was by 1974. Which isn't to say that Mao couldn't have dumped foodstuffs, but that the world was probably hungry enough in the 1960s and early 1970s to absorb it in the long run.

In the short run, I agree with what's been said above that the West would erect monstrous tariffs against China to protect their own agriculture which even today is subsidised within the US and EU.

(Edited for spelling and grammar)
 
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