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Authors: Odd Arne Westad

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It is more interesting to note that from its outset, economic aspects of the Sino-Soviet alliance already involved strong feelings and bitter images. While expecting the Soviets to treat China as an equal partner in order to build mutually beneficial economic relations, the reality left the CCP leadership confused and disappointed: A chauvinistic Stalin was no better than the imperial czars; primarily concerned about their own interests, the Soviets would not hesitate to take advantage of China's predicament. Yet Beijing authorities, acutely discontent with the Soviet attitude and deeply wary of Soviet intentions, were in no position to demand anything. Instead, they buried their suspicion, dissatisfaction, and resentment deep in their hearts; yet these emotions would slowly but surely come to the surface.
The Rise and Fall of a Sino-Soviet Trade Regime
After the end of the Korean War in July 1953, CCP leaders prepared for an immediate improvement in Sino-Soviet economic relations. With the East Asian international situation more stable than three years earlier, Beijing authorities were eager to speed up the nation's economic reconstruction and improve the country's defense capability. Moreover, to minimize the impact of the Western economic embargo on China, the CCP understood the crucial roles Soviet economic and technological aid would play. Although Stalin's death in March appears to have relieved Mao and his comrades, CCP leaders continued to harbor mixed feelings anxiety, expectations, misgivings, and vigilance toward Moscow.
Having sacrified a great deal in Korea, the CCP believed that China deserved a more favorable aid package from the Soviet Union; in effect, the Soviets owed China for its intervention in Korea. Indeed, China had paid a huge price for its military intervention. As many as twenty-five infantry divisions (73 percent of the PLA forces), sixteen artillery (67 percent), ten armored (100 percent), twelve air force (52 percent), and six guard divisions fought there along with hundreds of thousands of logistical personnel and laborers. A total of more than 2 million combatant and noncombatant Chinese were involved on the battlefield. According to Chinese statistics, the Chinese People's Volunteers consumed approximately 5.6 million tons of war materiel, including the loss of 399 airplanes and 12,916 vehicles. The People's Republic spent more than 6.2 billion yuan on the intervention.

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All these resources and manpower could have been utilized for China's own economic reconstruction.

Despite the heavy price China had paid, however, CCP leaders seemed euphoric. For the first time in its history, China could claim to have stood up against a major Western power. Only a few decades before, CCP propaganda reminded the Chinese people, a small "united army of eight Western countries"

 

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had subdued China (the international intervention of 1900) and 700,000 Japanese troops had conquered most of the country (Japan's invasion in 1937). But in Korea, "after three years of fierce fighting," maintained Peng Dehuai, the commander of Chinese forces in Korea, "the first-rate armed forces of the greatest industrial power of the capitalist world were forced [by the Chinese troops] to stop at where they began [their invasion of North Korea]." To him, this result had proven that "gone forever is the time when the Western powers have been able to conquer a country in the [Far] East merely by mounting several cannons along the coast as in the past hundred years."

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Given the success of China's intervention, Beijing authorities felt, the CCP was deserving of Moscow's respect and the Soviets should be more willing to aid China. Foreign Minister Chen Yi recalled later that only after China entered the war had Stalin expressed his "admiration" for the CCP's courage and resolve. Chinese leaders also noticed that the Soviet Union undertook measures to amend its cautious policy of aiding China. During a visit of Chinese Vice-Premier Li Fuchun to Moscow in May 1953, the Kremlin offered to construct defense-related industries for China. With little negotiation, Soviet Vice-Premier Anastas Mikoyan and Li signed an agreement that the Soviet Union would provide technology and complete sets of equipment to build up to 91 projects pertinent to China's defense industry.
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Mao was pleased with the altered Soviet attitude toward his regime. In his telegram to the Kremlin on September 15, he praised it as "a historically great undertaking" when the two governments achieved an agreement on long-term Soviet assistance after only one round of negotiations. With Soviet technological and economic aid, Mao assured Moscow that "we will industrialize China . . . so that China will play an important role in strengthening the socialist camp."
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The radical improvement of Sino-Soviet relations began in October 1954. Shortly after securing control of the Kremlin, Nikita Khrushchev went to China on September 29 and stayed through October 16. Between October 3 and 12, Mao and Khrushchev met several times while other leaders conducted "thorough and comprehensive" dialogues and negotiations concerning the future of Sino-Soviet cooperation. At the end of these meetings, two communiqués one an assessment of and policy toward the current international situation and one on policy toward Japan were released. More important, as both sides "exchanged" concerns over the "imperialist economic blockade" and reiterated their determination to "crush" it, the Soviets seemed more ready than ever to assist in China's economic reconstruction.
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As a result, Moscow increased its aid to China. In October Khrushchev agreed to provide another long-term loan totaling 520 million rubles. Moreover, he added to the previously agreed "reconstruction-aid" projects fifteen new ones

 

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for which the Soviets would supply complete sets of equipment and technical personnel to build China's energy and raw and semi finished materials industries.

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In March 1955 Moscow and Beijing signed a new aid agreement that stipulated an additional 16 industrial projects that would be funded entirely by the Soviet Union. These new projects would focus on construction of defense-related plants, shipbuilding, and raw and semi finished materials industries. Although some adjustments were made later, for the period under Beijing's First Five-Year Plan (1953-1957), the Soviet Union helped China to build as many as 166 industrial plants.
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In the 1950s Moscow also helped Beijing to acquire substantial aid from Eastern European countries, including East Germany, Czechoslovakia, Poland, Romania, Hungary, and Bulgaria. These countries agreed to assume the responsibility of constructing 116 completely equipped industrial plants and 88 partially equipped plants.
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Industrial and military technology formed an indispensable part of Soviet and Eastern European economic aid to China. Shortly after the Sino-Soviet agreement on technology transfer was signed in October 1954, Beijing obtained similar commitments from Eastern European countries. These agreements enabled China to acquire thousands of technological devices, products, and techniques. While Eastern Europe focused on agriculture and forestry technologies, the Soviet Union was responsible for supplying advanced technologies, including smeltery, ore dressing, petroleum prospecting, locomotive manufacturing, hydraulic and thermal power plants, hydraulic turbine manufacturing, machine tools, high-quality steel manufacturing, and vacuum installations. It is also interesting to point out that China merely compensated the Soviet and East European countries for the costs of blueprint duplication and copying; it paid nothing for the patent rights, and thus obtained these technologies practically for free.
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In addition, to ensure that the Chinese would master the techniques of production and scientific knowledge, the Soviet and Eastern European states dispatched more than 8,000 advisors and experts to China and received as many as 7,000 Chinese for advanced training and education in the 1950s.
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In taking steps to rectify the wrongs Stalin had done to the CCP, the new Soviet leadership also seems to have become sensitive toward Chinese national sentiment. While visiting China in October 1954, Khrushchev expressed his understanding of the CCP's acute sensitivity to sovereignty and independence. He proposed to Mao that the four Sino-Soviet joint ventures established in 1950 to 1951 oil and nonferrous metal manufacturing plants in Xinjiang and civil aviation and shipbuilding companies in Dalian become solely Chinese owned and operated. Khrushchev also went one step further by agreeing to the Chinese request that Soviet armed forces begin to withdraw from their naval bases in

 

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Lushun (Port Arthur); withdrawal would be completed before May 31, 1955, by which date China would exercise full authority over these bases.

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All these developments were very encouraging, and the Chinese leaders welcomed the changed Soviet attitude. However, by the late 1950s the honeymoon of Sino-Soviet cooperation was slowly but surely ebbing away. As the Western trade embargo relaxed, and as CCP's First Five-Year Plan seemingly accomplished a good deal, Beijing became increasingly eager to achieve industrialization and military modernization within as short a time as possible. To fulfill this lofty mission the CCP leaders were expecting steady increases in Soviet economic and technological assistance. Worried about and wary of an emerging powerful China, however, Moscow grew reluctant to meet the Chinese needs. As a result, the deeply rooted but temporarily suppressed suspicion of and misgivings about Soviet "chauvinism" inevitably revived, causing Chinese leaders to reconsider their political policy toward Moscow. Soon disagreements, private complaints, and even personal enmity led to public quarrels and open denunciations. This dynamic made the Sino-Soviet split inescapable by the end of the decade.
The most persistent dynamics driving the escalation of Sino-Soviet conflict was the CCP's aspiration to assert not only national autonomy but an equalpartner status. If the Chinese had hesitated to be assertive in 1950, they felt immensely encouraged by 1957. The First Five-Year Plan created a spectacular advance in industrial output. At the end of the planned period, steel production reached 5.35 million tons; iron, 5.8 million tons; electric power, 19.3 billion kilowatt-hours; coal, 131 million tons; and crude oil, 1.46 million tons.
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The industrial growth fueled the CCP leadership's ambition for rapid modernization. Addressing the thirtieth session of the Chinese People's Government Council on June 14, 1954, Mao laid out a timetable for China to become an industrial power: It would take China fifteen years to "lay down a foundation," and roughly fifty years to "build a powerful socialist country."
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Mao reiterated this goal in 1955. Proudly proclaiming that China would soon catch up with the United States, he explained that "America only has a history of 180 years. Sixty years ago, it produced 4 million tons of steel. We are [therefore] only sixty years behind . . . [and] we will surely overtake it."
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During his visit to Moscow on November 2-21, 1957, the CCP chairman boasted at a meeting with all the other leaders of Communist countries that China would overtake Britain in iron, steel, and other heavy industries in the next fifteen years and would exceed the United States soon thereafter in those areas as well.
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Shortly after he returned home, Mao became even more eager to have China outpace Anglo-American industrial strength. In April 1958 he argued that "it

 

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probably will not take us as long as we have anticipated to overtake the capitalist powers in industrial and agricultural production." Mao's illusion pushed the central leadership to plan to race past Britain and America; in May Mao assured high-ranking military commanders that "we are quite sure that we will exceed Britain in seven years and overtake the U.S. in ten years."

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The result of Mao's dreamlike aspiration was the "Great Leap Forward" movement, calling for a 19 percent increase in steel production, 18 percent in electricity, and 17 percent in coal output for 1958. Unduly buoyed by optimism, the CCP leaders kept raising the production targets in hopes of achieving an unprecedented rate of growth.
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Beijing, which had expected full support from the Soviet Union, felt disgruntled and discouraged when Moscow kept raising doubts about China's high hopes. In early 1957 the Soviet Far East Economic Committee, in its review of Far Eastern economic development, was bitingly critical of China's economic policies. Agitated by the "several errors [the report made] on China's economic development," Beijing's Foreign Ministry protested in a memorandum to Moscow on March 13, 1957. Referring to the Soviet finding that "China's agrarian collectivization has encountered peasants' opposition," the Chinese argued that "the speed of our country's agricultural collectivization, which has been fully explained by [CCP Vice Chairman] Liu Shaoqi in his report to the [National] People's Congress, completely refutes such a conviction." In discussing China's price problem, the PRC Foreign Ministry found that the Soviet assessment "deliberately distorts and obliterates our basic achievements . . . and instead, exaggerates our isolated weakness and mistakes." The Foreign Ministry memorandum then presented a lengthy explanation of how the draft paper "made errors merely by comparing our published statistics which are to serve different purposes.'' Given these mistakes, Beijing asserted, the Soviet leaders "could not help but draw erroneous conclusions" about China economic success.
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Mao, in particular, was bothered by the Soviet Union's skeptical and critical attitude toward China' s economic development. Continuing to look down on the Chinese, he believed, Moscow suspected that an industrialized China would seriously challenge Soviet leadership in the international Communist movement. In a conversation with a Yugoslavian Communist Union delegation in September 1957, Mao vented his bitterness about how Moscow had distrusted the CCP. Stalin had believed, he told his guests, that "there were two Titos in the world: one in Yugoslavia, the other in China, even if no one passed a resolution that Mao Zedong was Tito." Although the CCP had "no objection that the Soviet Union functions as the center [of the world revolution] because it benefits the socialist movement," Mao pointed out that

 

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