Annual EBHS Conference, 39th Annual Economic and Business History Society Conference

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Challenging Cold War Embargo: Western European Industrialists and China's Dream of Self-Reliance (1957-1965)
Valeria Zanier

Last modified: 2014-05-09


The paper will address economic relations between Red China and European non-communist countries in the chemical and petrochemical industry from the mid 1950s to 1965, especially focusing on information flows and business networks. It is in the author’s aim to challenge the mainstream interpretation and periodisation of communist China’s opening to the West, which sees Nixon’s opening in 1972. By endorsing the New Cold War historiography’s approach that challenges the idea of “secondary actors”- such as China and European countries - being mere clients of either Washington or Moscow, the paper will make use of previously unexploited European and Chinese sources to show that already from the mid 1950s China actively carried out economic exchanges with Western European states. In terms of international industrial relations, this is a period of great changes. Soon after the Suez crisis, the Middle East gained increasingly importance as oil producer, and US political involvement in the area grow considerably, and from 1958, Soviet Union emerged as a new player in the oil industry. One of the protagonists of that time were ENI (Italian State Hydrocarbur Company) and ENI President Enrico Mattei. Under Mattei’s presidency, ENI’s foreign interests were so vast that many observers have spoken of an Italian “parallel diplomacy”. Especially famous were ENI’s agreements with Egypt (1954), Iran (1956) and Soviet Union (1958) which provided Italy with diversified sources of oi. Mattei was considered a dangerous subject by the United States, because he expanded the possibilities of alliances far beyond the Seven Sisters and destroyed the system of the royalties, contributing to lower oil prices and reshaping oil world market. In a time polarized by the juxtaposition of the two Blocs and by commercial embargo, such relations were inherently complex. Moreover, as very little work has been carried out, the researcher often has no points of reference. How did Western companies collect information? What was the relationship between public and private actors in the decision making process? What level of importance would China attach to economic exchanges with European capitalist countries during Mao times? Last but not least, how much would US intelligence get of these business relations and how would they react to this? There was a colourful world made of shrewd businessmen, compassionate State managers, daring adventurers, and obscure intermediaries. All these characters influenced business and had political connotation. PRC information was predictably handled by institutional actors. Not so predictable is that Chinese decision makers were well aware of prices, state of the art of the industry and exchanged visits to Capitalist Europe quite regularly. Thanks to such a rich information network, economic exchanges with Western Europe during Mao times offered China a concrete alternative path to modernisation ‘Soviet style’ which sheds new light on China’s ambition to become a world player.