World Trade after Nationalist China Victory

Inspired by a similar thread I posted a year ago:
https://www.alternatehistory.com/forum/threads/economic-development-of-nationalist-china.390348/

This is going to be a very broad, high level scenario, so please indulge me in avoidng too much in the way of the specifics of how. Let us assume that the Nationalists secure mainland China. Without assuming that everything goes peachy keen for them, China remains connected to the trade networks of the West and gradually adopts an export-oriented economy, similar to their current economy. The main difference is the timing (ballpark guess: about two decades ahead of OTL’s schedule for when they really are the export behemoth) and - of more interest to me - the rate at which they become so dominant as an exporter.

What might world trade look like, and how might Western societies react, to this scenario? Lots of variables to consider:
- We’re not looking at a sudden explosion of Chinese production like in OTL’s 90s, where everything starts getting made in China overnight. Here, they follow a path similar to the other Asian exporters, rebuilding after WW2 and gradually clawing their way up the global supply chain.
- This is also further ahead of automation technology, so there’s not a near simultaneous one-two punch of cheap labor and cheap robotics to upend the economic order.
- China is - at minimum - rhetorically friendly to the West, so the economic matters don’t have to deal with as much saber rattling.
 

RousseauX

Donor
Inspired by a similar thread I posted a year ago:
https://www.alternatehistory.com/forum/threads/economic-development-of-nationalist-china.390348/

This is going to be a very broad, high level scenario, so please indulge me in avoidng too much in the way of the specifics of how. Let us assume that the Nationalists secure mainland China. Without assuming that everything goes peachy keen for them, China remains connected to the trade networks of the West and gradually adopts an export-oriented economy, similar to their current economy. The main difference is the timing (ballpark guess: about two decades ahead of OTL’s schedule for when they really are the export behemoth) and - of more interest to me - the rate at which they become so dominant as an exporter.

What might world trade look like, and how might Western societies react, to this scenario? Lots of variables to consider:
- We’re not looking at a sudden explosion of Chinese production like in OTL’s 90s, where everything starts getting made in China overnight. Here, they follow a path similar to the other Asian exporters, rebuilding after WW2 and gradually clawing their way up the global supply chain.
- This is also further ahead of automation technology, so there’s not a near simultaneous one-two punch of cheap labor and cheap robotics to upend the economic order.
- China is - at minimum - rhetorically friendly to the West, so the economic matters don’t have to deal with as much saber rattling.
The KMT wouldn't get the chance to export that much: post-war western markets were protectionist against foreign imports and remained to until liberalization under the 90s version of GATT and later WTO, the exceptions were made for a a few countries like Japan and South Korea whose population was much smaller than China's. I don't know if the international situation for big export led growth in China was there in what was still a very protectionist world in the 1950s.
 
Japan and Korea are going to be economic backwaters for much longer in that world. Both were able to overcome the poverty trap because of FDI which would otherwise have gone to China went to them.
 
The KMT wouldn't get the chance to export that much: post-war western markets were protectionist against foreign imports and remained to until liberalization under the 90s version of GATT and later WTO, the exceptions were made for a a few countries like Japan and South Korea whose population was much smaller than China's. I don't know if the international situation for big export led growth in China was there in what was still a very protectionist world in the 1950s.

How certain can we be of such a protectionist order existing in a world where the communists aren’t in power in China? After all, the backdrop of the Cold War is still in place, and what is the battle between communism and capitalism without the economics of the matter? Would the West refuse favorable (not necessarily ‘most favored’ status) trade deals to a friendly capitalist (maybe even semi-democratic, but lets not get carried away) China?

There is a geopolitical calculus to be played here, after all, and, despite not being communist themselves, the KMT did have friends in Moscow. If the West is too intransigent, could Nationalist China still end up in the Soviet orbit for awhile? This is an interesting scenario on its own, after all. Hell, it might even be worse for the West. After all, Nationalist China held the UN seat, and if they’re pro-soviet, even if they’re not communist themselves, there could be some problematic ramifications there.
 
Taking for granted that the KMT takes control of China, assuming the Communists and Warlords are all eventually subdued, and it unites China roughly comparable to modern China then I would opine that the KMT is going to be a significant "third" way. The KMT was enough "Communist" and enough "Capitalist" to be neither and both. It had a foot in the Soviet door and a nose in the German, later American tents, but it also had a strong nationalist streak that sought to get China out from under foreign dominance. So I think the path of Communist China is not too dissimilar, it will be a "neutral" in the Cold War, it will oppose colonialism, it will seek to industrialize, trade and grow in strength. The biggest differences are the increased possibility that democracy comes to China, that capitalism flourishes openly and if land reform happens. A KMT China has as many if not more challenges than the China we know but may have more opportunity for change sooner. One can look at India, a country that buys Soviet weaponry, is democratic, does a lot of business with the West and even has strong links to its former colonial master, it has irons in all those fires, and I think a KMT China would be much alike. In this world the USSR would not be as monolithic or potent in its appearance and would have just as complex a Far Eastern security concern. I think the KMT would not be a direct enemy nor a solid ally, it would pursue its own interests and that puts it in conflict with both the USSR and USA at different times on different issues. I do not think the KMT achieve any faster economic growth but I suspect that wealth might be better distributed if a true land owning class emerges, I think you have more small and middle-sized enterprise that actually boosts the economy rather than merely being a cheap labor pool. Best case is that China achieves the same wealth a generation sooner and it is spread a little wider based. We might see a faster evolution of trade among the second tier economies, not just USA and China, but China and India, China and Brazil, China and so on, so that trade is less resources out of the poorest countries to industry in the poorer countries and imports to the richer nations. I think we get a more robust and diversified global trade here.
 
Post 1945 Narionalist China was, believe it or not, a victim of extremely cheap American commodities and foodstuff, as domestic industry and agriculture was depressed by the lack of a protectionist tariff.

Until Chiang could take measures against American dumping, he could never create jobs for millions of Chinese and Make China Great Again.

It’s just one of the myriad of problems he faced.
 
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