Soviet Union-China

In the 1950s, the Soviet Union claimed half of China's foreign trade. The political rift that developed between the two countries in the late 1950s culminated in 1960 with the withdrawal of more than 1,000 Soviet specialists from China and an official break in trade relations in 1964. Although it had been only an observer, China stopped attending Comecon sessions in 1961. Economic relations between the Soviet Union and China resumed in 1982. Primarily as a result of Soviet political concessions and pressures on the Chinese to expand trade, trade volume between the two countries increased tenfold between 1982 and 1987.

In the 1980s, the Soviet Union proved to be an ideal trade partner for China. China's exports were not competitive on the world market, and its foreign currency reserves were severely depleted by record foreign trade deficits in 1984 and 1985. Likewise, the Soviet Union, producing dated technology that was difficult to market in more industrially advanced countries and acquiring a growing hard-currency debt, eagerly pursued the Chinese market. Each country would sell the other goods it could not market elsewhere, and each could conserve scarce hard currency by bartering. The Soviet Union possessed machinery, equipment, and technical know-how to help China develop its fuel and mineral resources and power, transportation, and metallurgical industries. China could offer a wealth of raw materials, textiles, and agricultural and industrial consumer goods.

Stepped-up economic relations reflected Soviet flexibility in overcoming various political and administrative stumbling blocks. By mid-1988 Gorbachev was speaking of reducing Soviet troops on the Chinese border, Vietnam had removed half of its troops from Cambodia, and Soviet troops had begun their withdrawal from Afghanistan (see Sino-Soviet Relations , ch. 10). Reforms of the Soviet foreign trade complex established free trade zones (see Glossary) in the Soviet Far East and Soviet Central Asia, simplifying border trade between the two countries. Soviet trade officials persuaded the Chinese to expand business ties beyond border trade into joint ventures, coproduction contracts, and the export of surplus Chinese labor to the Soviet Union. The Peking Restaurant in Moscow, specializing in Chinese cuisine, became the first joint venture between the Soviet Union and China. In April 1988, China's minister of foreign economic relations and trade, Zheng Toubin, stated that China would continue to expand trade with the Soviet Union ""at a rapid pace,"" thus rewarding Soviet persistence in expanding trade with China.

Data as of May 1989