China trade with the United States in some important commodities from 1946 to 1948 (Tung oil and bristle as exports-cotton, petroleum and tobacco as imports)
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As the Communist's control nearly the whole of China, it will be interesting to watch the trade between China and the United States in the future. America depends upon China for certain raw materials and China depends upon America ror many commodities, especially capital goods as they are needed badly in the stage of industrialization. To anticipate the future we must review the past; the trade during the Second World War was so abnormal that its data is of little value. The trade during the postwar years is more representative, but strongly influenced by war-created demand. Therefore, a relatively accurate picture might be obtained by examining the postwar trade situation in comparison with prewar data. The real causes behind the factual data are certainly the important things that we are looking for as guides to future trends of the trade between the two countries. It is certainly not feasible for me to investigate all the commodities which flow between these two countries in such a short period of time. As a result, I select some of the more important commodities and some of which hold great personal interest ror me. Upon the termination or the War, China found herself in a desperate economic condition. Peace was not her lot. Civil War brought new surrering and new dislocations to her people and their political economy. Inflation, followed by an unrealistic approach to economic problems on the part of an ill-prepared, inefficient government, provided no firm basis for internal or external trade. However, the trade between the two countries, China and the United States, was resumed. Since the war, America was the only nation able to export surplus goods as well as to provide foreign loans and aid funds. This gave the United States the dominant position in China's markets in the postwar years. On the other hand, China's share in the United States' imports was insignificant. China shared the United States' exports for the years 1946-1948 only 3.0% on the average while the imports she shared from the United States was only 1.8% on the average for the same period. China's most important import, raw cotton, amounted to $76 .5 million on the average for postwar years. In the prewar years, the possession by China of suitable natural conditions for cotton cultivation in many parts and availability of cheap labor had enabled her to become one of the world's largest cotton producers. The postwar cotton textile industry declined along with a sharp reduction in domestic production or cotton. But in the future, China should supply her own needs with cotton grown in her own fields. The prospect for tobacco leaf trade between these two countries is also not bright as China gradually succeeded in cultivating America seed tobacco suitable for her rising cigarette industry. Furthermore, her domestic production in the postwar years had already approximately reached her domestic requirement. The shortage is due primarily to disrupt transportation. China has petroleum resources which could supply her own needs at least in the first stage of industrialization. But her resources are located in the far West which could not be economically reached her existing transportation facilities. Their development will also require large production equipment probably originating in the United States. Therefore, China will continually be a good market for American petroleum products for some time to come. As to two exports, tung oil and bristles, America will continue to import them from China. Although the American tung oil industry made considerable progress in the cultivation of the tree and production of the oil, it is not very successful because of unsuitable soil and climate conditions. Furthermore, its supply is still far from meeting domestic demands. Due to the product's unique qualities, none of the substitutes could successfully replace this oil. America cannot also completely replace the bristle by synthetic fiber primarily because of special characteristics. However, in the case of shortage of the supply of the natural bristles, there would undoubtedly result an accelerated demand for the synthetic products and increased research to develop synthetic products with the characteristics of the natural. Our conclusion, therefore, is that China will enjoy a virtual monopoly in America's tung oil trade. On account of the rise of synthetic fibers, the prospect of bristles is more doubtful but will depend on whether China can maintain high quality, regular arrival and a reasonable price. The United States' exports to China of their three commodities - cotton, tobacco and petroleum - have not so bright a future. However, she may gain in export by selling China capital goods. Because, once an industrial China takes shape, she will need more and more industrial machinery, locomotives, vehicles, electrical equipment, aircraft and so on. But it is becoming clearer and clearer that trade between these two countries will depend on political developments now in the making.
Thesis (M.A.)--Boston University, 1950.