...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.