How Mao Zedong Shattered The U.S. Trade Blockade 70 Years Ago

After the establishment of the People’s Republic of China (PRC), the nation faced a shattered economy, widespread poverty, and near-collapsed industries, desperately needing capital, supplies, and technology to rebuild. As a result, China was in urgent need of foreign investment, advanced equipment, and technical expertise.

On October 1, 1949, Mao Zedong announced the establishment of the People’s Republic of China.

Yet at this critical moment, the United States imposed a strict blockade and embargo against socialist states, deliberately obstructing their economic recovery and growth. Washington even tied participation in the embargo to eligibility for U.S. aid, forcing other nations to cut off normal trade with these countries. This policy was a key component of America’s Cold War strategy, combining economic expansion with militarized containment. And no target faced harsher restrictions than China.

The U.S. Blockade and Embargo against China

For the newly founded PRC, the U.S. government declared, “Do not recognize Beijing under any circumstances, nor engage in trade with it” and insisted that “conditions must be created to hasten the collapse of this regime.” The U.S. National Security Council formalized this stance, directing efforts to prevent China from acquiring militarily critical materials or equipment from outside the Soviet bloc. It ruled out official U.S. economic aid to China and discouraged private investment in the country. Based on this stance, Washington launched a sweeping embargo and blockade against China. In November 1949, the U.S. spearheaded the creation of the Coordinating Committee for Multilateral Export Controls (COCOM)—a coalition of 14 capitalist nations based in Paris—to enforce strategic trade restrictions against socialist states.

Beginning in 1950, the U.S. escalated its blockade and embargo measures month by month. In February, Washington pressured Britain to halt shipments of strategic materials to China. In March, the U.S. unveiled a strategic materials control Act, which restricted over 600 categories of goods, including machinery, transportation equipment, metal products, and chemical supplies. Under this policy, all exports require strict review and licensing approval. The U.S. also demanded that all nations receiving Marshall Plan aid impose similar embargoes on China, and threatened to slash loans to any country that refused to comply.

In May 1950, the U.S. government amended its Export Control Act of 1946, significantly tightening trade restrictions. The measures escalated on June 29 with the enactment of the Export Control Act of 1950, which prohibited shipments of eleven strategic commodities – including kerosene, rubber, coconut oil, copper, diamonds, lead, and silver – to mainland China and Macau without special export licenses. On July 20, the U.S. Commerce Department revoked all existing export licenses for goods destined for China, requiring holders to surrender them for re-evaluation.

In mid-August 1950, the U.S. escalated restrictions further with a prohibited commodities export act, banning ten major categories of goods, including: metalworking machinery, non-ferrous metals, chemicals and chemical equipment, transportation equipment, telecommunications gear, and marine navigation systems. The law mandated that all exports to the Soviet Union, China, and Eastern Bloc nations, regardless of value, required export licenses. The crackdown continued in September with new cotton export controls, a complete ban on 20+ strategic materials, including steel and railroad supplies, and demanding licenses for all strategic goods shipped to Hong Kong and Macau.

October 1950 saw further restrictions as the U.S. imposed quota systems on exports of copper and copper products, zinc and zinc products, and lead. On October 28, U.S. customs officials were ordered to inspect American merchant ships anchored in Philadelphia and detain any prohibited export materials bound for China. By November, the Commerce Department had dramatically expanded its control list, quadrupling the number of restricted strategic materials from 600 to over 2,100 categories—an unprecedented scale of economic blockade in modern history.

By December 1950, the U.S. launched a comprehensive blockade, trade embargo, and foreign asset freeze against China. On December 2, the U.S. issued strengthened regulations on the control of strategic material exports, mandating that all goods bound for mainland China, Hong Kong, and Macau—whether strategic or non-strategic—be subject to government control. On December 8, it announced a harbor control order that prohibited all U.S.-flagged vessels from sailing to Chinese ports and required foreign merchant ships transiting U.S. ports to obtain approval from harbor control authorities for their cargo, with non-compliant shipments subject to seizure.

On December 16, the U.S. Treasury Department enacted the foreign assets control regulations, which froze all Chinese public and private assets under U.S. jurisdiction and required special licenses for all mail packages addressed to mainland China, Hong Kong, or Macau.

In March 1951, the United States implemented new restrictions on imports of Chinese native goods, then escalated its embargo in August by announcing a complete ban on all goods manufactured in China or North Korea, including any products processed in third countries using materials originating from these two nations. These progressively tightening embargo measures imposed by the U.S. ruling class ultimately severed all normal trade relations between China and the United States.

The U.S. then further escalated its economic containment strategy in May 1951 by orchestrating a United Nations General Assembly resolution imposing a trade embargo against China, ultimately coercing 36 nations into participating in these sanctions. Meanwhile, the Coordinating Committee (COCOM) established a China Committee to intensify control over prohibited goods shipments to China. To sum up, it can be seen that the number of participants in the blockade and embargo against China, the comprehensiveness of the measures, and the strictness of the controls are rare in the history of international relations.

According to incomplete statistics, China suffered direct losses totaling US$56.91 million between 1950 and 1953 as a result of the U.S. blockade and embargo, including US$41.82 million in frozen funds, approximately US$3.35 million worth of confiscated materials, and about US$11.74 million in losses from private-owned ships being hijacked before reaching Chinese ports. This statistic does not yet include all the materials seized from private merchants and the materials and ships that are not insured by the People’s Insurance Company.

At that time, the PRC was just established, with limited financial and material resources and huge internal and external expenditures. The above losses brought great difficulties to China’s economic development and social stability. China’s foreign trade work faced a severe situation, and the task of reversing the situation was very arduous.

China’s Efforts to Break Out of the U.S. Blockade and Embargo

Faced with what appeared to be an impenetrable U.S.-led blockade and embargo network, the Chinese people refused to surrender but to fight back in determined resistance. In response to America’s containment policy, China conducted meticulous research and implemented comprehensive strategies regarding foreign trade organizations, transaction methods, trade directions, and systemic reforms.

The overarching strategy focused on actively developing economic cooperation and trade relations with socialist nations like the Soviet Union while simultaneously valuing commerce with Western, Asian, and African countries. This dual approach sought to identify critical openings to secure urgently needed materials, break through the blockade restrictions, and ultimately normalize trade relations through expanded engagement with these diverse trading partners.

1. Purchased and Shipped Supplies in Advance

In July 1950, anticipating potential U.S. asset freezes, China’s Ministry of Trade urgently mobilized large-scale procurement of strategic materials. Between July 1 and early December, orders worth $200 million were placed, with half delivered by year’s end.

When the U.S. issued its regulations on controlling strategic material exports in December 1950, China’s Central Financial and Economic Commission (CFEC) responded on December 12 with seven countermeasures against the economic blockade. The first six were:

(1) Suspending all new purchase certificates and licenses for U.S. and Japanese goods immediately.

(2) Cancelling existing U.S./Japan purchase certificates and withdrawing foreign exchange to be used for emergency material purchases through other countries

(3) For the U.S. goods in transit, contacting the original agent bank to transfer the goods to other ports in the Far East under a bank guarantee, or entrusting the bank to resell them and return the foreign exchange.

(4) Accelerating shipment of orders from West Germany, Europe, and sterling bloc countries, or withdrawing foreign exchange or purchasing spot goods for immediate delivery back to China.

(5) Using deposits in neutral countries to purchase goods and ship them back to China.

(6) Halting all export licenses temporarily (except barter trade) to prevent freezing of foreign exchange.

Despite the escalating U.S. blockade and embargo measures, China’s import-export volume showed remarkable growth in the second half of 1950 through coordinated efforts to expedite material shipments and rapidly develop trade with the Soviet Union and Eastern Europe.

The inherent contradictions among capitalist nations—including internal conflicts between U.S. monopolistic corporations and small-to-medium enterprises—created opportunities for China to circumvent strict controls and procure essential materials. Gasoline, for instance, had been designated as a controlled strategic material since March 1950, yet China maintained uninterrupted imports throughout the year, with December volumes exceeding 10% of the annual average. Similar successes were achieved with diesel fuel and tinplate shipments.

2. Replaced Foreign Exchange Settlement with Bartering

The seventh countermeasure proposed by the CFEC is to restructure international trade practices by adopting a comprehensive barter system. This policy mandated that all future transactions with foreign countries would generally be conducted through goods exchange, with cash settlements permitted only under the circumstance of payment-upon-arrival or goods-upon-payment. Otherwise, it is better not to place an order to minimize the settlement difference in trade with capitalist countries.

In early 1951, the United States and Japan had already imposed export bans and frozen Chinese assets. The possibility of continued exports from Europe was unclear, and a large amount of goods ordered by China from capitalist countries had not yet been shipped back.

Amid this volatile import environment, Chen Yun and Bo Yibo, respectively the Director and Deputy Director of the CFEC, made a calculated decision: “For at least six months, our export approach must rely on barter trade rather than foreign exchange settlements. Only if concrete evidence emerges within two to three months confirming that Britain or Europe will continue shipping vital supplies to us, may we relax foreign exchange controls—but even then, the timing and quantity of imports must roughly match the scale of barter transactions.”  The barter system would operate on the principle of “import first, export later” or “simultaneous exchange in batches,” employing methods such as: direct goods-for-goods exchange, clearing account arrangements, linked barter transactions, and limited reciprocal letters of credit. The objective was to minimize default risks, ensuring that even if imbalances occurred, they would only involve minor residual balances.

Chen Yun with Mao Zedong

To implement these policies and measures, the Ministry of Trade convened the National Conference on Foreign Trade Administration on January 15, 1951. During this meeting, officials drafted and revised the “Interim Measures for the Administration of Barter Trade” and its implementing rules, which established the “import-first, export-later” principle and specified four approved methods of barter: direct goods exchange, clearing account barter, linked sequential barter, and reciprocal letter-of-credit barter. In coordination, the Bank of China issued its “Rules for Barter Trade Settlement” on March 27. Following these institutional developments, barter transactions began accounting for an increasing share of China’s foreign trade each successive month.

3. Import-Export Merchants Launched Coordinated Countermeasures

On December 16, 1950, the U.S. Treasury Department enacted the Foreign Assets Control Regulations, freezing all Chinese public and private assets under American jurisdiction. In response, the Chinese government issued a series of countermeasures: imposing controls on U.S. properties in China, freezing American bank deposits, and subsequently expropriating the assets of British Asiatic Petroleum Company facilities across China while compulsorily purchasing its oil reserves.

From July 13 to 25, 1950, the Ministry of Trade convened the National Import-Export Conference. The conference resolved to organize private businesses through various forms, establishing a system of division of labor and cooperation under the overall leadership of the state economy to develop import-export trade. It clearly delineated the operational scopes for public and private sectors: state-owned enterprises would handle exclusively purchased and sold import-export commodities while controlling only a portion of several major export items; for imports, besides managing industrial equipment and military supplies needed by the state, civilian equipment would only be traded to the extent necessary for regulating supply and demand and stabilizing prices. All remaining import-export commodities were allocated to private operation. Even for state-managed commodities, contract arrangements could be made to authorize private merchants to act as purchasing or sales agents. In the first half of 1950, private merchants accounted for nearly half of total export volume, while approximately 50% of state import-export business was conducted through private agents – a policy design aimed at preserving private sector profits and stimulating their business initiative.

The shift from foreign exchange settlements to barter trade in import-export transactions led to reduced export volumes at the beginning, causing economic hardships for workers in export-related industries and potential price declines for agricultural products traditionally sold abroad. To address these challenges, the CFEC implemented a dual-track approach. On one hand, it convened export merchants’ meetings, mandating collaboration between export and import traders to develop barter mechanisms while providing state assistance and guidance. On the other hand, the CFEC adjusted agricultural procurement policies – maintaining regular purchase volumes for some export-bound farm products based on projected demand and fiscal capacity, while moderately reducing others.

To offset export-related losses, the CFEC launched a nationwide rural-urban exchange initiative, organizing local specialty product conferences that stimulated domestic circulation of agricultural goods and partially compensated for declining foreign sales. The state maintained regular procurement and processing for most export-oriented handicrafts and value-added products, thereby preserving workers’ livelihoods while minimizing the need for relief expenditures.

Foreign Trade with the Soviet Union and Eastern Europe  

In July 1949, the Central Committee of the CPC sent a delegation to Moscow for meetings with Stalin, where they discussed the development plans for the newly established PRC and explored potential Soviet assistance. The following month, in August, Stalin reciprocated by dispatching a high-level advisory delegation headed by Kovalev, comprising over 200 senior officials at the deputy ministerial level or above and top-ranking engineers, to participate in China’s national reconstruction efforts.

Mao Zedong Met Stalin in 1949

In December 1949, Mao Zedong visited the Soviet Union for summit talks with Stalin and other leaders, aiming to secure an agreement that would be “both presentable and substantive”—presentable in demonstrating China’s diplomatic achievements to the world, and substantive by delivering concrete benefits. While the negotiations ultimately fell short of China’s full objectives, nearly three months of arduous bargaining—unusually prolonged by diplomatic standards—yielded two critical Soviet concessions: replacement of the 1945 Sino-Soviet Treaty of Friendship and Alliance (signed with the ROC government) with the new Sino-Soviet Treaty of Friendship, Alliance, and Mutual Assistance; and Soviet agreement to return the Chinese Changchun Railway and Lüshun Port to China.

The signing of the Sino-Soviet Treaty of Friendship, Alliance and Mutual Assistance was accompanied by several supplementary agreements, including: 1) The Agreement on the Chinese Changchun Railway, Lüshun Port and Dalian; 2) The Agreement on Soviet Loans to the People’s Republic of China; and 3) The Supplementary Agreement to the Sino-Soviet Treaty. Notably, the loan agreement stipulated that the Soviet Union would provide China with $300 million in credit at a preferential annual interest rate of 1%, specifically designated for financing Soviet-supplied machinery, equipment, and materials crucial for China’s postwar economic recovery and industrialization. The repayment terms required China to settle both principal and interest over a 10-year period through deliveries of raw materials, tea, cash (including USD), and other commodities.

Between 1950 and 1955, China secured a total of 11 loans from the Soviet Union, amounting to 1.274 billion new rubles. These Soviet credits enabled China to procure substantial quantities of urgently needed materials and equipment for economic construction, ultimately facilitating the successful implementation of over 150 industrial construction projects. This assistance played a transformative role in remedying the fragmented industrial landscape inherited from old China.

By 1954, China had signed agreements with the Soviet Union for a total of 156 industrial aid projects, collectively known as the “156 Projects.” These projects represented New China’s first large-scale industrial construction effort utilizing foreign capital, technology, and equipment, forming the backbone of China’s modern heavy industry and laying the preliminary foundation for socialist industrialization. While this form of openness had its limitations in terms of comprehensive effectiveness, it proved far more beneficial than relying solely on Adam Smith-style foreign trade relations.

Throughout these years, the Soviet Union and other socialist countries in Eastern Europe supplied China with substantial quantities of materials that were subject to the U.S. embargo, including various machine tools, machinery, steel products, non-ferrous metals, electrical and telecommunications equipment, precision instruments, petroleum, and chemical raw materials. The establishment and development of Sino-Soviet trade held significant importance and played a positive role in China’s economic recovery and development, as well as in strengthening national defense during the victorious resistance against U.S. aggression in Korea.

Following the U.S. embargo, many Chinese goods traditionally exported to Western countries were redirected to the Soviet Union, Eastern Europe, and other socialist states. To meet their needs, China made considerable efforts to expand its exports. In the early years of the People’s Republic, China’s exports to the Soviet Union primarily consisted of grains, edible oils, and soybeans from North and Northeast China. By 1952, exports gradually expanded to include tungsten, antimony, and other non-ferrous metals, as well as tea, raw silk, and meat. These goods helped alleviate food shortages in the Soviet Union at the time and provided essential raw materials for Soviet industrial development, constituting substantial support from China, despite its own economic difficulties.

Since the signing of the barter protocol with Poland and Czechoslovakia in 1950, the total import and export trade volume has reached 37 million US dollars; by 1951, the total import and export trade volume reached 391.14 million US dollars after signing barter protocol with East Germany, Hungary and Romania, which was about 10 times higher than the previous year. In 1950, the import volume of trade with Eastern Europe accounted for only 1.3% of the total import volume of the country, and the export volume accounted for only 3.8%; in 1951, the total import and export volume of trade with Eastern Europe accounted for 13.7% of the total import and export volume of the country. This development is also reflected in the expansion of the scope of trade, the increase in commodity items, shipping, and technical cooperation. In terms of countries, in 1951, the total trade volume of China’s trade agreements with Eastern European countries accounted for 51.13% with East Germany, 22.63% with Czechoslovakia, 12.91% with Hungary, 12.11% with Poland, and 1.21% with Romania.

China imported strategically vital industrial goods from these Eastern European nations, each contributing specialized equipment to support China’s industrialization: From East Germany came optical instruments, precision machinery, machine tools, and electrical equipment; Czechoslovakia supplied heavy machinery, transportation equipment, medium-sized power plants, and rolling mill components; Poland provided large metal products, steel materials, zinc and zinc products; Hungary contributed telecommunications equipment, agricultural machinery, diesel locomotives, automobiles, and pharmaceuticals; while Romania furnished drilling equipment.

To ensure exports to the Soviet Union and other socialist countries while countering the U.S. blockade, China established strict export principles: strategic materials like tungsten, antimony, tin, manganese, coal, and coke were prohibited from being exported to capitalist countries; secondary strategic materials such as iron ore, cattle hides, and goat skins could be exported minimally or withheld, to be exchanged only when necessary for strategic materials China lacked; less strategic goods like tung oil, hog bristles, raw silk, and grains were prioritized for socialist countries.

To meet import-export demands despite tight domestic supply, the State Planning Commission decided in early 1955 to prioritize foreign trade over domestic sales, particularly balancing the distribution of silk, tea, and animal products managed by the Ministry of Foreign Trade. Other commodities were also systematically allocated—for instance, pork exports totaled 140,000 tons, plus 40,000 tons of canned pork, amounting to 180,000 tons or 6% of national pork production, while egg exports accounted for roughly 10% of annual output.

By rapidly establishing trade relations with the Soviet Union and other socialist states, China not only achieved consistent growth in total trade volume but also transformed its trade structure. The proportion of imported capital goods increased, and as China’s economy recovered and industry developed, industrial products gradually accounted for a larger share of exports.

Foreign Trade with the Global South

The U.S.-led blockade and embargo disrupted the normal order of international trade, contracted global markets, and undermined the legitimate economic interests of numerous nations, fueling growing dissatisfaction among affected countries. This created favorable conditions for China to breach the embargo’s constraints.

Southeast Asia, as a major producer of primary agricultural commodities, held significant global market shares in the 1950s: approximately 95% of natural rubber, 63.42% of tin, 31.2% of tea, and around 10% of sugarcane production originated from the region. Other exports, including coconuts, quinine, jute, mica, manganese ore, pepper, and teak, also constituted substantial proportions of the world supply. Therefore, the foreign trade accounted for a large proportion of the national income. For example, at that time, the export trade income of Malaya generally accounted for 50% to 60% of the national income, Ceylon (now Sri Lanka) accounted for more than 36%, Burma accounted for 25% to 30%, Thailand accounted for 16%, and Indonesia and Pakistan accounted for 10% each.

The US embargo policy hit the exports of Southeast Asian countries, and also facilitated the US to conduct unequal exchange with Southeast Asian countries by means of price-cutting purchases and marketing surplus products. In 1952, India, Pakistan, the Philippines, and Indonesia suffered losses of US$451.56 million due to unequal exchange, and in 1953, the losses reached US$559.47 million.

Hong Kong, as an entrepot trade hub, built its economic prosperity on free trade—a fact best encapsulated by then-Governor Alexander Grantham’s declaration: “Trade is the lifeblood of Hong Kong,” with mainland China trade being its vital artery. However, after implementing the embargo, Hong Kong’s import-export volume plummeted precipitously year after year.

In 1951, Hong Kong’s total exports stood at HK$4.46 billion, with HK$1.68 billion (36.3%) destined for mainland China. By 1952, these figures had crashed to HK$2.93 billion and HK$520 million respectively; 1953 saw HK$2.74 billion and HK$540 million; 1954 recorded HK$2.42 billion and HK$390 million. By 1955, exports to the mainland had collapsed to less than one-tenth (7.5%) of 1951 levels. Exports to the U.S. and UK also nosedived, severely impacting the shipping industry.

The trade deterioration grew so acute that The China Mail, representing British commercial interests in Hong Kong, published a scathing analogy: “When you hand a man a knife and tell him to slit his own throat for the greater social good, you precisely capture Hong Kong merchants’ sentiments about the embargo.”

The first Southeast Asian country to break through the embargo was Ceylon (now Sri Lanka), the smallest nation in the Commonwealth. Ceylon’s economic survival depended on an annual import of 400,000 tons of rice, financed primarily through rubber exports. The U.S. embargo policy catastrophically drove rubber prices down from 0.735 per pound in December 1950 to a mere 0.245 by September 1951, pushing Ceylon’s rubber industry to the brink of collapse and triggering widespread unemployment. The United States pressured the Ceylonese government to sell rubber at below-market prices while simultaneously demanding that Ceylon purchase American rice at full market rates.

Unwilling to remain constrained by the embargo, the Ceylonese government expressed readiness to supply rubber to China in exchange for urgently needed rice. China promptly invited a Ceylonese trade delegation for negotiations in January 1952. On September 17, 1952, Ceylon’s Minister of Commerce and Trade, R.G. Senanayake, led a delegation to Beijing for substantive talks. During negotiations, China conscientiously implemented the principle of equality and mutual benefit, with government-approved price concessions. On October 4, the two nations signed a contract for China’s sale of 80,000 tons of rice to Ceylon. That December, they concluded a groundbreaking five-year trade agreement on rubber and rice.

Chinese Premier Zhou Enlai and Ceylonese PM Sirimavo Bandaranaike signing the Rubber-Rice Pack deal

The signing of this long-term trade agreement marked a major victory in China’s struggle against the economic blockade, generating significant international repercussions, particularly among Asian and African nations. Shortly thereafter, on March 14, 1953, China further consolidated its position by concluding a cotton-and-coal exchange agreement with Pakistan. Notably, due to British-American disagreements over embargo enforcement, U.S. President Eisenhower refrained from applying the Battle Act against Ceylon, instead continuing American aid to the small nation.

The 1955 Bandung Conference in Indonesia—the first major post-war international gathering exclusively for Asian and African nations—assembled delegates from 29 countries. And China sent Premier Zhou Enlai to lead the Chinese delegation. This historic meeting played a pivotal role in dismantling embargo barriers across the Global South. Significantly, the conference prioritized economic cooperation as its first agenda item, adopting resolutions that emphasized the urgency of regional economic development while proposing concrete implementation measures. The Chinese delegation seized every opportunity to foster dialogue through multiple channels, conducting extensive diplomatic engagements that substantially enhanced mutual understanding.

In the conference’s aftermath, China’s trade volume with numerous Asian and African countries surged remarkably, particularly with Middle Eastern, Near Eastern, and African partners. By 1956, China had established intergovernmental trade agreements with nine nations: India, Burma, Ceylon, Pakistan, Indonesia, Egypt, Syria, Lebanon, and Cambodia. And since 1951, Asia-Africa’s share of China’s total foreign trade has already surpassed that of Western countries.

The Normalization of Sino-Western Europe/Japan Trade

After World War II, the rapid economic recovery and development of Western European nations and Japan gradually intensified their conflicts and frictions with the United States. Regarding the implementation of the embargo policy, growing divergences emerged between the U.S. and countries like Britain, France, and West Germany. Many Western European nations came to believe—with varying degrees of conviction—that continuing the embargo against China after the Korean Armistice would neither significantly harm China nor benefit the West.

Under this situation, from 1952 to 1954, China made breakthrough progress in its trade relations with Western countries through two major international events: the Moscow International Economic Conference and the Geneva Foreign Ministers’ Conference.

The International Economic Conference held in Moscow in April 1952 was aimed at seeking the development of economic and trade relations among countries around the world. China sent a large delegation headed by Nan Hanchen, the governor of the People’s Bank of China, to attend the conference. Premier Zhou Enlai and Vice Premier Chen Yun asked the delegation to make careful preparations and make full use of this important conference to open up trade relations with Western countries and break the blockade.

During the conference, the Chinese delegation repeatedly explained that “China is willing to resume and develop trade with all governments and peoples, regardless of their beliefs, political systems, and social and economic organizations, as long as they are based on equality and mutual benefit”, and introduced the possibilities of China’s exports and the huge potential of imports.

By the end of 1952, China had successfully concluded trade agreements, accords, and contracts exceeding $200 million in total value with numerous Western nations—including Britain, the Netherlands, France, Switzerland, Belgium, Finland, Italy, Japan, West Germany, and Chile. Although not all agreements were fully implemented, their political and economic impact proved substantial. During the Moscow Conference, the Chinese delegation made particular progress with Japanese Diet members, jointly exploring avenues for Sino-Japanese non-governmental trade. This dialogue culminated in the signing of the first China-Japan private trade agreement in Beijing—a landmark achievement that paved the way for three subsequent agreements between October 1953 and March 1958. The momentum generated by these deals propelled bilateral trade to $126 million by 1956, setting a 1950s record.

In May 1952, China established the China Council for the Promotion of International Trade (CCPIT) as a non-governmental organization dedicated to facilitating East-West commerce. By July 1953, China had set up a representative office of its import-export corporation in East Berlin to handle trade with Western European nations. Later, the signing of the Korean Armistice Agreement in July 1953 marked a turning point, enabling the gradual expansion of China’s trade relations with the West. During the April-July 1954 Geneva Conference of Foreign Ministers, the Chinese government delegation, led by Premier Zhou Enlai, proactively engaged in diplomatic outreach, including direct talks with British representatives to express China’s willingness to develop bilateral trade. This diplomatic momentum culminated in a landmark invitation from British Labour Party figure Harold Wilson, to which China responded by dispatching a 17-day trade mission to Britain—the first official delegation sent to Western Europe since the founding of the PRC.

Business and banking delegations from Belgium, Italy, and the Netherlands successively arrived in Geneva to negotiate trade agreements with China, while commercial circles in France, Switzerland, West Germany, and Norway expressed intentions to organize trade missions to Beijing. Calls for relaxing embargo lists and expanding East-West trade grew increasingly vocal. By 1955, China’s trade volume with Western European countries had tripled compared to 1952 levels, with particularly significant growth in trade with Britain, France, West Germany, and Switzerland. In May 1957, Britain unilaterally decided to ease its embargo restrictions, prompting the CCPIT to organize a six-week China Economic and Technical Mission for reciprocal visits. This was followed by an October visit to China by a British Parliamentary Secretary for Trade. These developments contributed to a marked increase in Sino-British trade volume by 1958. Due to China’s persistent efforts and the growing unpopularity of the embargo policy, China’s overall trade with Western nations demonstrated a consistent upward trajectory throughout the 1950s.

The Increasingly Used “Exception Procedures” in Sino-Western Trade

First, China successfully broke through the economic blockade and embargo imposed by the United States and its followers, achieving rapid annual growth in foreign trade volume.

Second, China imported large quantities of production materials while increasing the proportion of industrial/mineral products and processed agricultural goods in its exports. This transformation in the composition of imports and exports demonstrated how foreign trade served China’s need to build an independent heavy industrial system, enhanced domestic industrial capabilities, and foiled imperialist attempts to strangle China’s economic development.

Third, the successful completion of China’s First Five-Year Plan marked the preliminary establishment of a socialist industrial foundation, serving as tangible proof of victory in the struggle against the blockade and embargo.

Finally, the blockade and embargo policy met with widespread international resistance and ultimately ended in failure. As the international situation eased and competition in world markets intensified, the struggle between the United States and other Western capitalist nations over control and counter-control grew increasingly acute.
China’s successful struggle against blockade and embargo ensured continuous growth in total foreign trade volume from the founding of the New China through the entire 1950s. By 1951 and 1952, China’s total foreign trade volume had already surpassed the ROC’s peak levels, fundamentally transforming the chronic ROC trade deficit into a roughly balanced import-export situation. From 1950 to 1952, China’s total import-export volume grew at an annual rate of 30.8% – a remarkably high growth rate in New China’s history.

Since 1953, divergences over embargo enforcement had been growing between the United States and countries like Britain, France, and West Germany. French public opinion viewed the embargo provisions as violating national sovereignty and dignity. West Germany’s industrial circles advocated for lifting the embargo.

By mid-1954, over 200,000 British trade union members demanded expanded trade. The overwhelming desire across British society to find markets for goods and improve economic conditions forced Prime Minister Winston Churchill to declare in his February 25, 1954, House of Commons speech: “We must substantially relax restrictions affecting manufactured goods, raw materials and shipping.” This speech caused strong “unease and concern” in the United States, which was compelled to agree to reduce its embargo list against the Soviet Union.

On January 30, 1956, British Prime Minister Anthony Eden stated that three years after the Korean Armistice, it was unrealistic to continue prohibiting exports to China while allowing them to the Soviet Union and Eastern European countries. The British Foreign Secretary publicly announced that Britain would increasingly utilize “exception procedures” under appropriate circumstances to facilitate reasonable exports to China.

Subsequently, British colonies such as Malaya (now Malaysia) and Singapore announced they would export rubber to China through licensing systems. The Indonesian government declared the lifting of its rubber embargo. The Japanese government permitted the exhibition of embargoed goods at trade fairs in China and later approved their sale to China. West Germany showed particular enthusiasm for the Chinese market, rising to become the top Western European trader with China by 1956. These developments progressively widened the breaches in the embargo. Due to various constraints, the United States failed to implement aid suspension measures against countries violating the Battle Act, including Ceylon, Britain, France, Norway, Italy, and Denmark.

On May 30, 1957, Britain decided to relax its foreign trade controls. Within a month, most industrialized countries participating in the COCOM successively announced the easing of trade restrictions against China. The West German government declared the removal of 20 items from its embargo list of 400, including automobiles, tires, and certain types of machinery. Western European nations gradually disregarded the embargo, utilizing “exception procedures” to export so-called strategic materials to China.

These developments inevitably drew increased attention from both monopoly capitalists and small-to-medium businesses in the United States toward the Chinese market, so opposition to the embargo and blockade grew louder. Statistics show that by the end of 1957, China’s trade volume with Western capitalist countries had increased more than sixfold compared to 1952. After entering the 1960s, China’s economic cooperation and trade relations with Western capitalist nations expanded even more extensively.

The Complete Failure of the US Blockade and Embargo Policy against China

In 1971, the People’s Republic of China resumed its lawful seat in the United Nations, prompting many countries to establish diplomatic relations with China and further normalize economic and trade ties. In 1972, U.S. President Richard Nixon’s visit to China and the subsequent issuance of the Shanghai Communiqué by both governments broke the two-decade-long stalemate in Sino-American political, economic, and trade relations, leading to the gradual restoration and normal development of direct bilateral trade.

Mao Zedong met Richard Nixon in 1972

With the improving international environment for foreign economic exchanges, China signed over 220 contracts for importing technology and equipment from Western countries between 1972 and the end of 1977. Particularly noteworthy were the “43 Program” initiated in 1973 and the “78 Plan” of 1978, both of which achieved relatively systematic technology import schemes. Moreover, China made its first software technology import in 1976. By this point, the U.S.-led blockade and embargo against China since the founding of the People’s Republic had essentially ended up failing.

This laid the foundation for China’s implementation of modern-era opening-up policies. As Deng Xiaoping pointed out: The current international conditions, which are far better than in the past, enable us to absorb advanced international technologies and management experience, as well as foreign capital.

The historical experience of blockade and counter-blockade since the founding of New China demonstrates that the United States, in order to maintain its control over the global economy and its leading position in the world, cannot accept the development of other countries surpassing its own and will inevitably employ various measures to restrict them. Among these measures, economic blockades and embargoes—being operationally convenient and leveraging America’s overwhelming economic superiority—have proven particularly effective in impeding other nations’ development, thus becoming a frequently used tool by the U.S.

Following the establishment of the People’s Republic, the United States imposed decades-long blockades and embargoes against China. Even after China’s reform and opening-up, against the backdrop of thawing Sino-American relations, while the scope of U.S. embargoes against China narrowed, they were never completely abandoned. In fact, during certain specific periods, these restrictions were even intensified. Therefore, it remains imperative to maintain high vigilance.

Editor: Chang Zhangjin