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HWW American Game Changers

Shanghai Communiqué

by Patrick Bridgemon

Category: Economics; International Relations

Date: Issued February 28, 1972

The Joint Communiqué of the United States of America and the People’s Republic of China, also known as the Shanghai Communiqué (1972), was issued on February 28, 1972 during President Richard Nixon’s historic visit to China. The Shanghai Communiqué marked the normalization of US relations with China, and its impact—opening Chinese markets to the US and US markets to Chinese goods—has had a transformative effect on the world and US economies. It also sowed the seed for the rise of China as a hegemonic power in the twenty-first century.

Background

“I will undertake what I deeply hope will become a journey for peace, peace not just for our generation but for future generations on this earth we share together.” So said President Richard M. Nixon in a televised speech on July 15, 1971. The speech announced a major shift in U.S. trade policy with the People’s Republic of China. On February 21, 1972, at the invitation of Premier Zhou Enlai of China, Nixon began a historic weeklong visit to Beijing that created new and lasting commercial relations between the two countries. On February 27, the two leaders signed the Shanghai Communiqué, establishing some basic guidelines for U.S. and Chinese economic policy reforms, setting the stage to reestablish mutually beneficial trade relations.

Trade relations between the two countries had changed dramatically following the outbreak of the Korean War. Twenty-two years earlier, on June 28, 1950, President Harry S. Truman had declared a national emergency and placed an embargo on all U.S. exports to China. He was granted authority to do this primarily under the Export Control Act of 1949 and the Trading with the Enemy Act of 1917. When Communist China had entered the Korean War early in 1949, the United States began imposing selective trade controls on that country. By July 20, 1950, the United States had successfully blockaded all strategic export items, including ammunition, atomic energy materials, and petroleum. In October, 1950, Chinese Communist forces joined the North Korean army.

The trade embargo and the trade controls imposed by allies of the United States were basically acts of economic warfare designed to weaken China’s capacity to wage war in Korea. Partners in the North Atlantic Treaty Organization (NATO) had placed greater restrictions on their trade with China than with other Communist countries such as the Soviet Union. As a result, the list of products banned for export to China was more comprehensive than those for other Communist countries. The effectiveness of the embargo, however, was strongly undermined. If China could not buy goods from Western Europe or Japan, it could get them from the Soviet Union or Eastern Europe, if perhaps at a higher cost.

After the Korean War ended, commercial pressures for decontrol began to build in a number of Western European countries and in Japan. Removal of many of the restrictions occurred in a piecemeal fashion as allies began to disregard them. As early as 1957, the United States officially reduced the list of banned exports to China, putting China on the same basis as other Communist countries. As a result, allied controls did not prevent China from getting most goods but merely imposed higher resource costs on the Chinese economy.

Between 1949 and 1970, economic growth in Communist China fluctuated. In 1950 and 1951, the country experienced strong growth, but it leveled off in 1952. From 1953 to 1956, the growth continued under a program of expansion known as the First Five-Year Plan. Another leveling occurred in 1957, followed by the Great Leap Forward of 1958 to 1960, which produced dramatic growth followed by a depression. From 1960 to 1962, the deep depression affected most areas of the Chinese economy, including agriculture, industry, and foreign trade. Gradual economic recovery began after the 1962 harvest and continued until 1966, when China’s economic growth rate exceeded that of the Great Leap Forward. The Cultural Revolution beginning in 1966 once again set China’s economy back.

Nixon shakes hands with Chinese leader Mao Zedong. (U.S. National Archives and Records Administration)

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On March 28, 1969, U.S. national security adviser Henry Kissinger gave a directive to review the U.S. trade embargo with China. As a result, the United States modified trade controls against China in two ways. First, the ban on travel to the People’s Republic of China was removed. Second, the United States allowed American tourists to purchase up to $100 worth of Chinese goods and bring them back to the United States. These steps, perhaps in combination with growing Soviet aggressiveness around the world at the time, caused China to begin a reassessment of its policies concerning the United States.

When President Nixon took his historic trip to China in February of 1972, he was well received. In addition to promoting the progressive development of trade between the two countries, the Shanghai Communiqué of February 27 also stated that both sides viewed bilateral trade as mutually beneficial and agreed that economic relations based on equality were in the interest of citizens of both countries.

Nixon’s televised speech had announced a policy shift that was formalized in the Shanghai Communiqué, but it was not until 1980 that trade relations with China normalized. On January 24, 1980, Congress passed the U.S.-China Trade Agreement, granting most-favored-nation status for Chinese exports to the United States.

Impact

Learning to trade with China was a complex undertaking in the beginning. After the signing of the Shanghai Communique, ten American companies were invited to attend the Canton Trade Fair held in the spring of 1972. One of these companies stands out as an example of establishing successful long-term trade with China. Seabrook International Foods, Inc., was a manufacturer of finished fabrics and home furnishing products, also distributing frozen foods. By 1979, its annual consolidated sales were $827.9 million. Seabrook’s success prompted questions concerning trade with China. What factors helped Seabrook succeed? Did the success depend on the particular line of products, or did other more general factors contribute? What other companies would succeed in establishing trade with China? Would many other companies move jobs to the Far East, as Seabrook had? A survey from the National Council for U.S.-China Trade found that such factors as the managerial attitude of the American firm, its product characteristics, and familiarity with the Chinese culture could all affect a company’s success. Differences in ideology and culture were serious issues that had to be addressed in order for companies to conduct relations.

Nixon Speaks on China

When President Richard M. Nixon returned to the United States on February 28, 1972, following a weeklong trip to the People’s Republic of China, he made these hopeful remarks about the future of relations between the two nations:

When I announced this trip last July, I described it as a journey for peace. In the last 30 years, Americans have in three different wars gone off by the hundreds of thousands to fight, and some to die, in Asia and in the Pacific. One of the central motives behind my journey to China was to prevent that from happening a fourth time to another generation of Americans.

As I have often said, peace means more than the mere absence of war. In a technical sense, we were at peace with the People’s Republic of China before this trip, but a gulf of almost 12,000 miles and 22 years of noncommunication and hostility separated the United States of America from the 750 million people who live in the People’s Republic of China, and that is one-fourth of all the people in the world.

As a result of this trip, we have started the long process of building a bridge across that gulf, and even now we have something better than the mere absence of war. Not only have we completed a week of intensive talks at the highest levels, we have set up a procedure whereby we can continue to have discussions in the future. We have demonstrated that nations with very deep and fundamental differences can learn to discuss those differences calmly, rationally, and frankly, without compromising their principles. This is the basis of a structure for peace, where we can talk about differences rather than fight about them.

The primary goal of this trip was to reestablish communication with the People’s Republic of China after a generation of hostility. We achieved that goal.

The rapprochement with China eventually transformed the global economy. The US and China now have the largest bilateral trading relationship in world history. Around $160 billion of US goods and services are sold each year in China. Those goods and services represent almost one million US jobs. Further, many major American corporations, such as Apple, use Chinese labor to manufacture their products.

For Further Information

Buss, Claude A. China: The People’s Republic of China and Richard Nixon. W. H. Freeman, 1972.

Choudhury, G. W. China in World Affairs: The Foreign Policy of the PRC Since 1970. Westview Press, 1982.

Congressional Quarterly, Inc. China and U.S. Foreign Policy.

Edited by William B. Dickinson, Jr. Author, 1973. De Pauw, John W. “Introduction.” In U.S.-Chinese Trade Negotiations. Praeger, 1981.

Foot, Rosemary. The Practice of Power: U.S. Relations with China Since 1949. Oxford University Press, 1997.

Mann, James. About Face: A History of America’s Curious Relationship with China, from Nixon to Clinton. Vintage Books, 2000.

Tung, Rosalie L. U.S.-China Trade Negotiations. Pergamon Press, 1982.

Citation Types

Type

Format

MLA 9th

Bridgemon, Patrick. "Shanghai Communiqué." HWW American Game Changers, edited by D. Alan Dean, Salem Press, 2020. Salem Online, online.salempress.com/articleDetails.do?articleName=HWGame_0206.

APA 7th

Bridgemon, P. (2020). Shanghai Communiqué. In D. Alan Dean (Ed.), HWW American Game Changers. Salem Press. online.salempress.com.

CMOS 17th

Bridgemon, Patrick. "Shanghai Communiqué." Edited by D. Alan Dean. HWW American Game Changers. Hackensack: Salem Press, 2020. Accessed May 09, 2025. online.salempress.com.

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