U.S. – China Relations: Diplomatic Game Changer

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Jonathan Sharp reported feeling underwhelmed by the arrival in Beijing on May 13, 1973, of the first permanent U.S. diplomat since Mao Zedong took power a quarter-century earlier. With the benefit of hindsight, that event now appears a truly historic turning point


At nine o'clock on a warm, May evening, the silver-haired, 74-year-old maestro of the U.S. Foreign Service, David K.E. Bruce, stepped down from his Soviet-built, Chinese-owned airliner after landing at Beijing's only, and in those days very quiet, commercial airport.

There on the tarmac to greet him was a squad of Chinese officials plus a gaggle of ambassadors from countries on good terms with the U.S. Unsurprisingly, given the main purpose for Washington’s entente was to drive a further wedge between Beijing and Moscow, no one from the Soviet bloc diplomatic corps turned up.

It was a momentous occasion, even though it lacked the frenzied ballyhoo that attended the China visit of President Richard Nixon a year earlier, or even the surprise visit of American table tennis players in the ice-breaking episode known as Ping Pong Diplomacy in 1971. In my report for Reuters news agency I described the Bruce arrival as "underwhelming."

It had been a long day for the venerable envoy and his elegant wife Evangeline, despite the fact they had merely traveled from Hong Kong.

For a start, in the early 1970s there were no direct flights from Hong Kong to Beijing. Indeed there were hardly any flights at all from anywhere in the world to China, which explains why Beijing's international airport was so eerily noise-free. The Middle Kingdom was still obsessively inward-looking and secretive, its leadership cliques locked in a power struggle sparked by the calamitous Cultural Revolution launched in 1966 by Chairman Mao Zedong and still being played out.

Diplomatic fudge

Part of the reason for the lack of public pomp around Bruce’s arrival was that the mission he was to lead with such distinction was in an anomalous position in the Beijing diplomatic pecking order. It did not rate as a full-fledged embassy, since the U.S. still had diplomatic relations with the nationalist government in Taiwan. Instead the newly minted American mission was called the U.S. Liaison Office. This title was a neatly crafted fudge that allowed both nations to have embassies-in-all-but-name in the other's capital without going the whole hog of full diplomatic relations. That step didn’t happen until 1979.

But if the U.S. Liaison Office ranked low on the protocol totem pole – it didn't rate a mention on China's still-slender official Diplomatic List of foreign missions in Beijing – it punched way above its weight in terms of China expertise and authority.

That aura of authority stemmed largely from the presence of Bruce, whose storied career blossomed during World War II when he headed the Europe branch of the Office of Strategic Services, forerunner of the Central Intelligence Agency. His subsequent career included ambassadorships in West Germany, France and Britain – the only American to have held the posts in all three of the key U.S. allies in Europe.

With AmCham in Hong Kong

However China was new to him, as was Hong Kong, where he spent a week before taking the complicated, drawn-out journey into China. In his voluminous diaries, superbly compiled by Priscilla Roberts in her book "Windows on the Forbidden City," Bruce describes Hong Kong as a "fantastic enclave". He recalls being "interrogated lengthily during a meeting with members of the Board of Governors of the American Chamber of Commerce; more than five hundred U.S. business and banking firms have offices here." The number today is some 1,400.  

After checking out of their "comfortable and enormous" suite at the Mandarin hotel (their bill for a week's stay came to US$932 – or about HK$4,950 at the time), the Bruces embarked on what many of us Beijing residents regarded as a day of tedium.

It started with a slow train trip from the Kowloon station (only the clock tower remains today) to the border with China. There followed a short walk across the narrow rail bridge that marked the border, a two-and-a half hour wait in what was then the nondescript village of Shenzhen, a train journey to Guangzhou and finally a plane to Beijing.

It may have been boring for Beijing regulars, but not for neophyte Bruce: "This was one of the pleasantest days I ever spent." It no doubt helped that Chinese officials treated Bruce, a noted gourmand, with two bountiful feasts of Chinese food. Bruce had his first taste of the legendary sorghum-based spirit Mao Tai, "whose effects have been likened to swallowing lightning or a red-hot poker." Mao Tai, cheap then, now retails in my local liquor store in Hong Kong for HK$2,600 a bottle – painful to buy as well as to drink.

The end of the historic day for Bruce came not in a spacious ambassadorial villa – his residence was still being built – but an apartment in a nine-story block, coincidentally where I and my Reuters colleague lived and worked. And initially at least, the Liaison Office was obliged to send its confidential reports to Washington via the embassy of an ally, Canada, until its own communications link was up and running.

To help the Bruces settle in, Chinese authorities provided a battery of local staff. Among them – this was a nice touch – was someone who was a reminder of a bygone and hugely different era in U.S.-China relations. He was a butler, a fluent English-speaker called Mr Chang. Amazingly he was same butler who worked for Leighton Stuart, the last U.S. ambassador to serve in China before the Communist takeover 24 years previously.

Bruce's final diary entry for May 14 1973 reads, "E. [Evangeline] and I went happily to sleep, enchanted with the prospect of living in this fabled city."


20/20 Hindsight

The past is a foreign country, the saying goes. They do things differently there. And how different Hong Kong must have been before Richard Nixon made his historic 1972 trip to Beijing, setting in train a process that would deliver unprecedented economic growth to China, fueled by an explosion in global trade.

Momentous stuff? It didn't seem that way back then, if AmCham's archives are any guide. While Chamber committees whipped up debate over filthy streets, outrageous home prices and the lack of skilled workers in Hong Kong (sound familiar?), businesses used the city's strategic location to launch into fast-growing markets elsewhere in Asia. Indonesia, Singapore and Japan were among top picks in AmCham's 1972 survey. Low taxes and light-handed regulation meant Hong Kong offered much more than a funnel into China.

“By coincidence, when the world was fascinated by the television, radio and press coverage of the Nixon visit to China, I ran across an item in The Joy of Cooking, which stated categorically that sauerkraut was fed to the thousands of workers who built the Great Wall of China,” mused AmCham Executive Director Herbert L. Minich in the March edition of the magazine covering the historic summit.

Had Tricky Dicky missed a trick by not boosting sales of U.S. cabbage growers, he asked, before speculating on Chinese shortages of soft wheat best suited for making noodles. “The noodle offers the most appetizing prospect for any significant trade with Communist China,” he said. “Other than potential markets for agricultural products, experts see little chance for sizable exports to the Chinese in the near future."

The first cracks in America's Cold War embargo of communist China had appeared at the end of 1969. From March 1971, visa restrictions were eased on travel between the U.S. and China – allowing “ping pong diplomacy” as well as business delegations; currency controls were lifted; exports approved; shipowners allowed to carry Chinese cargo. Nixon cleared the sale of high-tech navigation systems to help Boeing sell four 707 airliners.

But there remained a complete lack of information about how to do business on the mainland. The commercial rules of engagement would have to be learned from scratch. “Normalizing ties” – the goal of the U.S.-China communique – was going to take a while.

Foreign policy shifts between two such giants was “somewhat similar to love-making between elephants,” John J. Taylor, the deputy head of the China Mainland Section at the U.S. Consulate General, told members in 1971. “Everything important takes place at a high level and is accompanied by loud trumpeting, but it is almost a year before something, if anything, comes out of it.”

By the close of 1972, total trade between the U.S. and China amounted to less than US$370 million over the previous 22 years, government data show.

Little wonder that AmCham's 1971 business sentiment survey – conducted by legendary emerging markets investor Mark Mobius – found that while 89 percent of the Chamber's 223 China Trade committee members were keen to do business over the border, less than a quarter had made any attempt to do so.

 

“There is clearly an overwhelming need for basic information,” David L. Osborn, Consul General and AmCham honorary chairman, was still writing two years later.

Boeing and some other big U.S. companies had some early successes in specific areas where China was seeking to rebuild an economy shattered by the chaos of Maoist policy mistakes. Monsanto, Cargill, John Deere and Caterpillar all made early inroads. Still, for most, Chinese markets were too speculative, too hard and too small.

“China's growth potentials are great and cannot be ignored, but they should be measured in the context,” was AmCham Hong Kong's official line. “We and the US Government should not repeat past mistakes by becoming overly fascinated by China and thereby losing track of Asia's major economic power – Japan.”

A smooth transition to Japanese rule for Okinawa was at the forefront of Chamber priorities. As was fending off rising protectionism fueled by America's ever-worsening trade deficit, which “made it very clear to everyone in Washington that trade is now our squeaky wheel,” said. “The U.S. is not interested in beggaring its neighbors but in establishing rules of the game we can all live with.”

Against that backdrop, it's perhaps unsurprising that the lure of a vast and untapped Chinese market – as it has so many times before and since – pushed some analysts into fantasies of wishful thinking. U.S. exports of goods to China could hit US$650 million by 1980, and imports US$250 million if trade restrictions were removed, a National Committee on United States-China Relations study predicted.

But only in a perfect world.

A less optimistic forecast, the authors said, would be for balanced trade of up to US$200 million on either side. Wishful thinking indeed.


The embassy in London entertained all sorts of people—writers and artists, longhaired dropouts, the socially prominent and the politically powerful. As Prime Minister Harold Wilson told Mr. Bruce, “Your ambassadorial epitaph will never contain the phrase ‘United States Ambassador to the Establishment.’”

Mr. Bruce was a man of singular grace who seemed able to perform any task, whether diplomatic, social or financial, with a refreshing admixture of charm, toughness, amiability, slyness, wit and an aura of offhanded expertise. He had a reputation as a man of reason, capable of being polite and quietly analytical on the most agitated of subjects. When a diplomatic bargaining discussion turned uncomfortably overheated, he was apt to cool matters with generous pourings of Dom Perignon.

-- New York Times obituary, December 1977