Leading the Way: The United Kingdom's financial and trade relations with Socialist China, 1949–1966

Abstract

AbstractThis article aims to deepen scholarly understanding of the special political and economic connection between Britain and Socialist China during the 1950s and the 1960s. After 1949, the British government had substantive reasons to preserve a link with Beijing, despite the unfolding of the Cold War. First, British assets in China were numerous. Second, the Crown colony of Hong Kong was an indispensable strategic enclave, although militarily indefensible. Third, the Foreign Office considered that Asia should represent an exception to unquestioned British loyalty to the Atlantic alliance, since the United Kingdom needed to prove that it was able to represent and preserve Commonwealth interests in the area. The article will point out that the United Kingdom maintained a privileged role as the main trading partner of the People's Republic of China (PRC) outside the Socialist bloc, thanks to the financial and commercial role played by Hong Kong. This is proved through an analysis of the fate of British financial institutions in China, which represented a favourable exception in the bleak scenario of the PRC nationalization process, as well as of the industrial development of the British colony, which was based on importing food and labour from the mainland, while serving as a financial hub in support of the PRC economy.