yield of rubber manufactured on China's Hainan Island was being sold to the Soviets at "preferential prices." The Chinese understood that these strategic materials were "indispensable" in Soviet development of missiles and nuclear weapons.
65 Given its special relations with Hong Kong, Sri Lanka, and other non-Communist countries, China, even in the late 1950s, could acquire some materials on the lists of Western trade embargo and conduct entrepôt trade on behalf of the Soviet Union. According to Chinese sources, between 1953 and 1957 China imported for the Soviet Union a large amount of rubber, jute, coconut oil, and black pepper worth a total of 330 million yuan. Moreover, the Chinese leaders also believed that their country's agricultural products of rice, beans, peanuts, vegetable oil, salt, beef, pork, mutton, eggs, and fruit, which made up more than 48 percent of its exports to the Soviet Union, were essential to Soviet efforts to survive the Western trade embargo. During the same period, China also had been paying back Soviet loans with gold and hard currencies. Understanding that the Soviets were short of U.S. dollars, by 1958 Beijing had paid Moscow a total of $156 million in cash. 66
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